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Century Aluminum’s 3Q15 Earnings Release Sparked a Selling Spree

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Century Aluminum’s 3Q15 earnings

Century Aluminum (CENX) released its 3Q15 financial results on October 29, 2015, after the markets closed. The company reported a net loss of $56.1 million in the quarter. Century Aluminum had posted a net profit of $50.4 million in 3Q14.

Century Aluminum’s 3Q15 earnings unleashed a selling spree on Wall Street. The company’s share price fell more than 20% intraday and finally closed at $3.62 on October 30—down 15.6% from its previous day’s closing.

Century Aluminum (CENX) has generally been quite volatile in the earnings season. The market reaction to Century Aluminum’s 2Q15 earnings was even more severe. CENX stock fell ~40% intraday after the company released its 2Q15 earnings.

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CENX stock has been falling

The graph above shows the recent stock market performance of aluminum companies. Century Aluminum (CENX) has been among the worst-performing aluminum plays this year. Year-to-date, the stock is down ~85%. Constellium NV (CSTM), a leading aluminum fabricator, is not far behind, losing almost 75% of its market capitalization this year.

It has been a dull earnings season for the aluminum industry. Alcoa (AA), which is the leading aluminum producer in North America, also missed its consensus earnings estimates. The markets punished Alcoa for its worse-than-expected earnings, sending its stock down 6.8% after the earnings release. Together, Alcoa and Ball Corporation (BLL) form ~4% of the Materials Select Sector SPDR ETF (XLB).

Series overview

In this series, we’ll explore the key takeaways from Century Aluminum’s (CENX) 3Q15 earnings. We’ll discuss the industry outlook provided by Century Aluminum’s management. We’ll also look at the key concerns surrounding Century Aluminum and how the company plans to address these issues.

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