Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of aluminum producer Century Aluminum
So what: For the quarter, Century announced earnings per share of $0.64 on revenue of $317 million. The reported EPS doesn't appear to be comparable to the $0.23 estimate from Wall Street as it was padded by a $57 million benefit from changes to a retiree medical benefits program. Revenue, however, did top expectations and, with or without the one-time benefit, the company reversed a loss from last year. Though Century's management is cautious due to factors like low levels of activity from developed economies and inflation concerns in faster-growing developing countries, the trends appear to be moving in the right direction as shipments increased versus last year's fourth quarter and prices climbed.
Now what: As noted above, uncertainties about global growth and commodity prices have left the company a bit cautious. Wall Street seems to have a rosier view of the situation though, as current analyst estimates show the company's earnings per share jumping to $1.17 for 2011. Based on revenue multiples, the stock appears to be reasonably priced right now, so the question will be whether the aluminum market can provide a further tailwind for the company's results.
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