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Kaiser Aluminum: Aerospace Inventory Overhang Update & 2014 Outlook
Edited by : AL CIRCLE
1 min read
"Previously, I turned cautious on Kaiser Aluminum (KALU) because the aerospace inventory overhang was a bigger problem than the company initially expected (see Kaiser Aluminum & The Aerospace Inventory Overhang). Since that article, Kaiser Aluminum's management team has appeared at three investor conferences and given more information about the impact of the aerospace inventory overhang in 2014 and 2015. Although Kaiser Aluminum has good long term prospects, the inventory overhang over the next several quarters will likely weigh on the financial results and warrants some short term caution. In this article I will analyze management's recent comments on the overhang and the company's prospects for 2014.
Aerospace Plate Inventory Overhang
The aerospace industry is experiencing secular growth, led by growing demand for new planes from Boeing (BA) and Airbus. Furthermore, new planes are being made with more aluminum, which benefits suppliers like Kaiser Aluminum.
However, the supply chain is long and complicated, so Kaiser Aluminum can experience choppiness despite the growth at the top of the industry and the positive long term growth drivers."
Aerospace Plate Inventory Overhang
The aerospace industry is experiencing secular growth, led by growing demand for new planes from Boeing (BA) and Airbus. Furthermore, new planes are being made with more aluminum, which benefits suppliers like Kaiser Aluminum.
However, the supply chain is long and complicated, so Kaiser Aluminum can experience choppiness despite the growth at the top of the industry and the positive long term growth drivers."
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