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Century Aluminum’s 4Q Earnings – Shipments Rose

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Century Aluminum’s fourth quarter earnings

In the last part of this series, we discussed Century Aluminum’s (CENX) major plants and operations. Now, we’ll analyze its fourth quarter earnings. Century Aluminum posted an adjusted earnings per share, or EPS, of $0.65 in the fourth quarter. Its EPS was $0.52 in 3Q14. The earnings were lower than Wall Street’s expectations.

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Shipments rose

The above chart shows a snapshot of Century Aluminum’s fourth quarter earnings. As you can see, in the fourth quarter, global shipments increased ~4%—compared to the third quarter. In Iceland, shipments increased by 5% due to the ongoing expansion project at Grundartangi.

In the US, its shipments increased by 3% over the previous quarter. However, this was due to the acquisition of the Mt. Holly smelter. As we discussed previously, Century Aluminum acquired Alcoa’s (AA) remaining stake in this plant. Currently, Alcoa forms 3.30% of the Materials Select Sector SPDR ETF (XLB). Allegheny Technologies Inc. (ATI) forms 0.77% of XLB.

Pricing

In the US, Century Aluminum prices aluminum with a one-month lag to the London Metal Exchange’s, or LME, prices. In the fourth quarter, its average realized aluminum prices increased 5%—compared to the third quarter. This includes the LME aluminum price and the regional premiums.

In Iceland, Century Aluminum sells most of its produce with a two-month lag to aluminum prices. Its average realized prices in the fourth quarter went up 9%—compared to the previous quarter. Constellium N.V. (CSTM) has its major operations in European countries.

Due to the combined impact of higher average selling prices and an increase in shipments, Century Aluminum’s net sales in the fourth quarter went up by 10%—compared to the previous quarter.

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

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