Zacks_Analysts' Blog : Century Aluminum Narrows Loss - Analyst Blog

Century Aluminum (CENX) reported lower-than-expected results for the fourth quarter of 2009. The aluminum producer posted a fourth-quarter loss of $24.4 million, or 28 cents per share, compared with a loss of $693.5 million, or $14.14 per share, in the same quarter of 2008.

Adjusted earnings matched the Zacks Consensus Estimate and the market estimate. For the full year 2009, the company reported a net loss of $206.0 million or $2.73 per share, compared with a net loss of $895.2 million or $20.00 per share in 2008. 

Sales for the quarter were $256.8 million compared with $402.2 million for the fourth quarter of 2008. Shipments of primary aluminum were 147,700 tons, compared with 202,260 tons shipped in the year-ago quarter. Sales for 2009 were $899 million compared with $1,971 million for 2008. Total 2009 primary aluminum shipment volume of 605,126 tons compared with 803,771 tons shipped in 2008.

Century faces several challenges in the near term including higher power costs at a facility in Hawesville, Kentucky. Electricity makes up about a third of the cost of producing aluminum. The company is currently paying a reduced rate at the Hawesville site, but when that deal runs out this year, Century could be forced to pay 60% to 70% more. Century expects power costs to rise by $65 million in 2011.

The company has lowered its near-term earnings outlook. Century expects to earn 50 cents per share for 2010, down from a previous estimate of $1.80 per share. In 2011, the company aims to earn $2 per share, down from a prior projection of $2.90.