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Jun 30, 2020
Kaiser Aluminum Q2 2020 Earnings Report
Reported second quarter earnings reflecting the impact of lower demand across end markets due to COVID-19, but costs were aggressively flexed in response.
Key Takeaways
Kaiser Aluminum Corporation reported a net loss of $7 million for the second quarter of 2020, with adjusted earnings per diluted share of $0.36. The company's value added revenue decreased to $175 million, reflecting a 24% decrease in shipments due to COVID-19 impacts. Despite the challenges, the company maintained a strong liquidity position of approximately $1.0 billion.
Net sales were $276 million, with value added revenue of $175 million, a 17% year-over-year decrease.
Reported a net loss of $7 million, or $0.41 per diluted share, which includes pre-tax restructuring charges of $12 million.
Adjusted net income was $6 million, with adjusted earnings per diluted share of $0.36.
Adjusted EBITDA was $34 million, with an adjusted EBITDA margin of 19.7%.
Revenue by Segment
Forward Guidance
For the second half of 2020, Kaiser Aluminum anticipates total value added revenue will be down approximately 10% to 15% from the second quarter pace, with EBITDA margin in the mid-teens. Total capital spending for the full year 2020 is expected to be approximately $50 to $60 million.
Positive Outlook
- Anticipate a strong rebound for automotive applications to value added revenue similar to the first quarter pace as customers return to more normal operations, and new program launches resume.
- Proactively initiate capital spending on a number of organic investment opportunities to further support automotive growth and enhance efficiencies throughout our operations.
- Have ample liquidity and more visibility for our end markets.
- Expect normal seasonal demand weakness for our general engineering applications.
- Aerospace shipments were heavily weighted to the first half of 2020.
Challenges Ahead
- Value added revenue for large commercial aerospace and defense applications is anticipated to be down approximately 15% to 20% from record full year 2019 results.
- Value added revenue for aerospace and high strength applications will be weak in the second half as large commercial aerospace shipments were heavily weighted to the first half of 2020.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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