How Did Century Aluminum Perform in 1Q16?

Century Aluminum (CENX) released its 1Q16 financial results on April 28 after the markets closed. The company reported an adjusted net loss of $22 million in the quarter, which translates into adjusted EPS (earnings per share) of -$0.23. Century Aluminum posted an adjusted EPS of -$0.53 and $0.72 in 4Q15 and 1Q15, respectively.

Though Century Aluminum’s earnings have fallen steeply on a year-over-year (or YoY) basis, we’ve seen some improvement on a sequential quarterly basis. It’s important to note that market conditions changed significantly last year. In this context, it would be more prudent to look at the quarterly changes as compared to the YoY changes. The same would hold true for other commodity (DJP) producers including Rio Tinto (RIO), Norsk Hydro (NHYDY), and Alcoa (AA).

Century Aluminum managed to beat earnings estimates in 1Q16 as can be seen in the graph above. Nonetheless, the company is expected to be in the red for the next two quarters based on the current consensus estimates. Note that Century Aluminum has been among the best-performing aluminum companies this year. The stock has gained ~100% year-to-date. In comparison, Alcoa has gained 13% since the beginning of the year while Constellium (CSTM), which is a Europe-based aluminum fabricator, has lost 24%.

In this series, we’ll look at Century Aluminum’s’ 1Q16 earnings. We’ll analyze how the key financial metrics fared in the quarter. Note that 1Q16 earnings and 2016 guidance are crucial for some of the commodity companies to justify their recent rally.

Let’s begin by looking at Century Aluminum’s 1Q16 revenues and shipments in the next part of the series.