Kaiser Aluminum reports net income of $22 mln in Q3 2018; Value added revenue for aerospace applications increases 14%

Leading aluminium value-added company Kaiser Aluminum Corporation announced third quarter and first nine months financial results.  For the third quarter of 2018, the company reported net income of $22 million, or $1.29 per diluted share, compared to net income and earnings per diluted share of $20 million and $1.16, respectively for the prior year period.

Adjusted net income, excluding the impact of non-run-rate items, was $24 million or $1.43 per diluted share in Q3 2018, compared to adjusted net income of $16 million, or $0.90 per diluted share in Q3 2017. The improved year-over-year results primarily reflected the impact of a lower corporate tax rate in 2018, partially offset by temporary tariff costs on internal cross-border transactions.

Kaiser reported net sales of $393 million, and value-added revenue of $205 million, reflecting improving demand for our aerospace applications and full realization of price increases implemented in the second quarter 2018.

For the first nine months of 2018, the Company reported net income of $68 million, or $4.03 per diluted share, compared to net income of $61 million, or $3.49 per diluted share, in the prior year period. Excluding the impact of non-run-rate items, adjusted net income increased to $80 million. Kaiser reported net sales of $1.2 billion, and value added revenue of $618 million.

Jack A. Hockema, Chairman and Chief Executive Officer said: “Third quarter 2018 results reflected higher aerospace shipments as supply chain destocking continues to moderate and from the full realization of price increases implemented in the second quarter 2018. Strong operating leverage and improved sales margins more than offset the temporary impact of tariffs on our internal cross-border shipments.”

“Although the tariffs have negatively impacted short-term results, we continue to anticipate that the long-term impact to us will be neutral to slightly positive should the tariffs remain in place.”

 “During the quarter another significant portion of the Trentwood modernization project was completed with the installation of handling equipment at the light gauge plate furnace. Going forward, our focus will continue to be on implementing practice changes to extract the full benefit of the new equipment that will drive continuing improvements in efficiency, capacity and product quality.

“The acquisition of Imperial Machine and Tool Co., ('IMT') allows us to gain further insights into the potentially disruptive additive manufacturing technology, and enhances our ability to address customer needs by broadening our capability to provide innovative solutions for demanding applications. IMT has a steady EBITDA stream from its machining business, and we expect to achieve a return in excess of our cost of capital with significant upside potential for growth and leadership in the emerging additive manufacturing technology,” stated Mr. Hockema.