Century Aluminum Company CENX used its second-quarter 2026 earnings call to emphasize production restarts, balance-sheet strength and progress on its Oklahoma smelter.
Reported earnings of $2.39 per share missed the Zacks Consensus Estimate of $2.4, while net sales of $752.1 million missed the $835.3 million estimate. Adjusted earnings were $2.46 per share.
CENX Reaches Full Capacity Across Smelters
CEO Jesse Gary said that Mt. Holly restarted its final 90 pots in late June, returning the plant to full capacity.
Gary added that Grundartangi’s Line 2 restart was completed at the end of July, about six months ahead of the timeline outlined last October. The plant is near full production at reduced amperage until new transformers arrive.
In response to a Wells Fargo analyst, CEO Jesse Gary said that Mt. Holly has experienced post-restart instability but expects it to be resolved in the third quarter, with volume improvement in the fourth quarter.
Century Sets Q3 EBITDA Range Amid Cost Pressures
CFO Peter Trpkovski guided third-quarter adjusted EBITDA attributable to Century to $325 million to $345 million compared with $326.9 million in the second quarter.
Trpkovski expects lagged LME and regional premium changes to add $5 million to $10 million sequentially. Higher Mt. Holly production and shipments should contribute $15 million to $25 million through volume and mix.
Trpkovski also expects $10-$15 million of seasonal energy headwinds, about $5 million of raw-material pressure and a $20-$25 million drag from realized hedge settlements.
CENX Sees Tight Aluminum Market Supporting Demand
Gary described U.S. aluminum demand as the strongest Century has seen in years, citing power and data infrastructure, commercial aerospace, defense programs and reshoring of downstream fabrication.
Gary expects a global aluminum deficit of 1 million tonnes in 2026 and deficit conditions to continue in 2027. He said that global inventory coverage is approaching all-time lows.
Gary cautioned that curtailed Middle Eastern production may not return quickly because restarting potlines and normalizing raw-material supply chains take time. Century is bringing additional U.S. and Icelandic output into that environment.
Century Advances Oklahoma Funding and Tariff Benefit
Gary said that detailed engineering, energy-contract negotiations and financing work are progressing for Century’s Oklahoma smelter project with Emirates Global Aluminum. He still expects a final investment decision and groundbreaking by year-end, with first hot metal by the end of 2029.
Gary said that the secured $500 million Department of Energy grant remains in place, subject to project milestones. In a Q&A with a B. Riley Securities analyst, he added that Century is discussing other financing sources, including government funding.
Gary expects the project to qualify for a new U.S. tariff incentive. Century could import up to 300,000 metric tons annually at a 25% tariff rate beginning in 2027, versus 50% otherwise, and use the benefit to help fund its share.
CENX Sharpens Cash and Cost Priorities
Trpkovski said that Century ended the quarter with no borrowings on its revolving credit facilities. In July, it received $94 million in 45X tax-credit cash and $19 million in Iceland insurance recoveries, leaving cash above total debt.
Trpkovski also said that working capital rose as Mt. Holly returned to full capacity and finished-goods inventory increased on shipment timing. He expects part of that inventory to convert to cash in the third quarter as growth capital spending declines.
Asked by a BMO Capital Markets analyst about shareholder returns, CEO Gary said that Century remains focused first on liquidity, sustaining capital and organic growth. Capital returns remain a potential priority once Oklahoma’s engineering and financing needs are clearer.
Century Keeps Execution at the Center
Gary’s closing message centered on execution after completing the Mt. Holly expansion and restoring Grundartangi Line 2. Attention now shifts to stabilizing output, improving cash conversion and advancing Oklahoma.
Gary emphasized balance-sheet capacity and policy support as tools for funding Oklahoma while preserving flexibility for other priorities.
CENX’s Zacks Signals Point to a Mixed Setup
CENX carries a Zacks Rank #5 (Strong Sell). It has a Value Score of C, a Growth Score of A, a Momentum Score of C and a VGM Score of B.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The A Growth Score and B VGM Score show favorable growth and blended style characteristics. However, the Zacks framework prioritizes the Rank, and a Zacks Rank #5 reflects declining earnings estimate revisions. The Rank can change as estimates are revised after the just-reported results.
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Century Aluminum Company (CENX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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