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Century Aluminum Crashed After Its 4Q Earnings Release

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Mar. 3 2015, Published 9:04 a.m. ET

Century Aluminum crashed

Century Aluminum (CENX) posted its 4Q14 financial results on February 24 after the market closed. The earnings came in lower than analysts’ expectations. Century Aluminum’s share price tanked more than 12% after its earnings.

This is in contrast to 3Q14, when its earnings topped Wall Street’s forecast. Century Aluminum’s share price reached its 52-week high after it released its third quarter earnings. Since then, its share price corrected 40%. Currently, it forms 3.99% of the SPDR S&P Metals and Mining ETF (XME).

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What do we cover?

In this series, we’ll discuss Century Aluminum’s fourth quarter earnings in detail. In our 3Q earnings overview, we highlighted that Century Aluminum is one of the most expensive aluminum plays. It seems that the market was factoring all of the company’s positives.

In this series, we’ll discuss Century Aluminum’s growth opportunities. We’ll also analyze how investors can play Century Aluminum in 2015. It underperformed its peers on Wall Street this year. You can see this in the above chart.

So far, in 2015, Century Aluminum is down ~25%. In contrast, Alcoa (AA) is down 7%. Currently, Constellium N.V. (CSTM) gained 12% in 2015.

Aluminum industry

The aluminum industry had a decent run last year. Aluminum prices closed 2014 almost flat—compared to the previous year. However, aluminum premiums jumped 80% last year. Aluminum producers—like Rio Tinto (RIO) and BHP Billiton (BHP)—benefit from higher aluminum premiums. Aluminum premiums came down a bit in the last couple of weeks. We’ll discuss this in more detail later in this series.

In the next part of this series, we’ll discuss Century Aluminum in more detail.

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