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CHICAGO - Century Aluminum Company (NASDAQ:CENX), with a market capitalization of $1.81 billion, has welcomed the recent decision by the U.S. government to double tariffs on imported primary aluminum. The announcement, made in Pittsburgh last Friday, saw the Section 232 tariffs increase from 25 percent to 50 percent. This move is aimed at bolstering domestic production of metals deemed vital for national security. According to InvestingPro analysis, the company appears undervalued at current levels, with analysts maintaining positive forecasts for 2025.
In response to the tariff hike, Century Aluminum has revealed plans to construct the first new U.S. aluminum smelter in five decades, a step that is expected to double the country’s production capacity. The company’s strong financial position, with revenue growth of 11.41% and net income of $113.5 million in the last twelve months, supports this ambitious expansion. Jesse Gary, the President and CEO of Century Aluminum, expressed gratitude towards President Trump for his steadfast support of the aluminum industry and American manufacturing jobs.
Century Aluminum, the largest producer of primary aluminum in the United States, operates facilities not only domestically but also in Iceland, the Netherlands, and Jamaica. The company’s expansion plans come at a time when the U.S. administration is focusing on reinforcing critical supply chains and preserving jobs within the country.
The increase in tariffs is a strategic measure to encourage domestic production and investment in the industry, which has faced stiff competition from foreign imports. By raising the cost of imported aluminum, the U.S. government hopes to level the playing field for American producers like Century Aluminum.
This development is based on a press release statement from Century Aluminum Company. The company has cautioned that their forward-looking statements, such as the construction of the new smelter and the anticipated doubling of production, are subject to various risks and uncertainties that could cause actual results to differ materially from those projected.
Investors and market watchers will be monitoring the impact of the tariff adjustments on the broader market, as well as the progress of Century Aluminum’s expansion plans, which are poised to reshape the U.S. aluminum industry landscape. With a beta of 2.7, the stock exhibits significant volatility, making it crucial for investors to stay informed. InvestingPro subscribers can access additional insights, including 6 key ProTips and a comprehensive Pro Research Report, helping navigate this dynamic investment opportunity.
In other recent news, Century Aluminum reported its first-quarter 2025 earnings, revealing a significant miss in earnings per share (EPS) compared to expectations. The company’s adjusted EPS was $0.36, falling short of the forecasted $0.61. However, revenue exceeded predictions, coming in at $634 million against an anticipated $577.2 million. This divergence highlights a strong sales performance despite profitability challenges. Furthermore, Century Aluminum reduced its net debt by $55 million and increased liquidity to $339 million.
The company has also been in the spotlight due to a positive revision of its outlook by S&P Global Ratings. The outlook was revised from stable to positive, with S&P affirming the ’B-’ issuer credit rating, citing improving credit metrics and profitability. This change is based on expectations of stronger earnings and cash flow, potentially leading to a rating upgrade if certain financial metrics are maintained. The company also completed the Iceland casthouse project, allowing for expansion into low-carbon billets.
Century Aluminum acquired a 55% stake in Jamalco, a bauxite mining and alumina refining operation in Jamaica, which has contributed to its profitability. Additionally, the company received about $93 million in tax credits in fiscal 2024, partially offsetting production costs. Looking forward, Century Aluminum anticipates Q2 2025 adjusted EBITDA to be between $80 million and $90 million, with continued focus on debt reduction and ongoing development projects.
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