Centrus Energy LEU is set to release its fourth-quarter 2024 results on Feb. 6, after market close. 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for LEU’s fourth-quarter sales is pegged at $105.20 million, implying 1.5% growth from the prior-year quarter’s figure. The consensus mark for earnings is pegged at $1.06 per share, indicating a year-over-year plunge of 70.4%. Earnings estimates have remained unchanged in the past 30 days.

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LEU’s Earnings Surprise History

LEU’s earnings have outpaced the consensus estimate in two of the trailing four quarters while missing in two, the average surprise being 15.44%.

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What the Zacks Model Unveils for Centrus Energy

Our proven model does not conclusively predict an earnings beat for Centrus Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Busy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

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Earnings ESP: The Earnings ESP for Centrus Energy is 0.00%.

Zacks Rank: LEU currently carries a Zacks Rank of 3.

Factors Likely to Have Shaped LEU’s Q4 Performance

Centrus Energy operates two business segments, LEU and Technical Solutions. The LEU segment provides the enrichment component of Low-Enriched Uranium ("LEU"), which is measured in Separative Work Units ("SWU"). The company also sells natural uranium hexafluoride (UF6) and occasionally sells uranium concentrates, uranium conversion, or LEU with the natural uranium hexafluoride and SWU components combined into one sale.

The Technical Solutions segment offers technical, manufacturing, engineering and operations services to public and private sector customers. A key project is the American Centrifuge Plant in Piketon, OH, producing High-Assay, Low-Enriched Uranium (HALEU) under a contract with the Department of Energy (DOE).

After completing Phase 1 of the HALEU operation contract in November 2023, Centrus Energy transitioned to Phase 2, per which it has to produce 900 kilograms per year of HALEU UF6 and complete continued operations and maintenance by November 2024. However, due to supply-chain issues, the DOE could not provide the storage cylinders to collect the output and production was impacted.

Centrus Energy, thus, stated that the target was not achievable by November. Till the third quarter of 2024, the company delivered 332 kg of HALEU. Centrus Energy expected cylinders to have been available during the fourth quarter, which will allow it to continue producing HALEU. 

The LEU segment generated 79% of the company’s total revenues for the nine-month period ended Sept. 30, 2024. Its backlog was $3.8 billion as of Sept. 30, 2024. Of this, $2.8 billion pertained to the LEU segment, which extends to 2040. The backlog of approximately $0.9 billion of the Technical Solutions segment extends to 2033. This is expected to be reflected in the company’s results. 

The LEU segment’s results are expected to showcase higher sales volumes of uranium but will likely be offset by lower average prices of uranium seen in the fourth quarter. The segment’s cost of sales, however, is expected to have been higher due to increased volumes sold and elevated unit cost prices. Gross profit is expected to have declined due to the specific contract and pricing mix of SWU contracts and the timing of their deliveries.

Revenues for the Technical Solutions segment are expected to have been higher on a year-over-year basis in the first nine-month period of 2024, reflecting the transition from Phase 1 to Phase 2 in late 2023. This is expected to have continued in the fourth quarter as well. Costs for the segment are expected to have been higher due  to the HALEU operation contract. Higher revenues, offset by increased costs, are expected to have boosted the segment’s gross profit. 

During the fourth quarter, Centrus Energy announced that its main supplier TENEX’s export license had been rescinded as Russia has banned the export of LEU to the United States or U.S.-registered entities. Per the mandate, TENEX had to obtain a specific export license to ship LEU to the company. Failure on Tenex’s part to do so might impair Centrus Energy’s delivery commitments to customers, which could affect its results. No update has been provided by the company since.

LEU Stock’s Price Performance

Centrus Energy’s shares have gained 58.5% in the past year compared with the industry’s 37.5% growth.

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Stocks to Consider

Here are some companies in the basic materials space, which, according to our model, have the right combination of elements to post an earnings beat this quarter:

Hecla Mining HL, slated to release fourth-quarter 2024 earnings on Feb. 13, has an Earnings ESP of +50.00% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HL’s earnings for the fourth quarter is currently pegged at four cents per share. The estimate indicates a turnaround performance from the loss of four cents per share in the year-ago quarter. Hecla Mining has a trailing four-quarter average earnings surprise of 50%.

Kinross Gold Corporation KGC, scheduled to release fourth-quarter earnings on Feb. 12, has an Earnings ESP of +36.76%.

The Zacks Consensus Estimate for Kinross Gold's earnings for the fourth quarter is currently pegged at 23 cents per share, indicating year-over-year growth of 109%. KGC currently carries a Zacks Rank of 3. It has a trailing four-quarter average earnings surprise of 32.5%.

International Flavors & Fragrances IFF, slated to release fourth-quarter 2024 earnings on Feb. 18, has an Earnings ESP of +3.33% and a Zacks Rank of 3 at present.

The consensus mark for IFF’s fourth-quarter earnings is currently pegged at 78 cents per share. It indicates year-over-year growth of 8.3%. IFF has a trailing four-quarter average earnings surprise of 10.9%.

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