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Sep 30, 2020
Kaiser Aluminum Q3 2020 Earnings Report
Reported third quarter earnings, with results impacted by the pandemic and rebound in automotive demand.
Key Takeaways
Kaiser Aluminum Corporation reported a net income of $0.4 million and adjusted earnings per diluted share of $0.33 for the third quarter of 2020. The results were driven by a rebound in automotive demand and continued strength in demand for defense and general engineering applications, but were impacted by the ongoing pandemic, particularly in the commercial aerospace sector.
Net sales were $256 million, and value added revenue was $154 million, a decrease of 28% year-over-year.
Net income was $0.4 million, with net income per diluted share at $0.02.
Adjusted net income was $5 million, with adjusted earnings per diluted share at $0.33.
Adjusted EBITDA was $30 million, with an adjusted EBITDA margin of 19.6%.
Revenue by Segment
Forward Guidance
The Company anticipates total capital spending for the full year 2020 to be approximately $50 million to $60 million.
Positive Outlook
- Continued strength in demand for defense applications expected in 2021, driven by growth in the F-35 joint strike fighter and other legacy and rotary military aircraft programs.
- Strong demand for automotive extrusions is expected to continue to be driven by growth in aluminum content and North American vehicle build rates, currently projected to increase from 12.9 million vehicles in 2020 to over 15.2 million vehicles in 2021.
- Well positioned to continue to navigate challenging market conditions and capitalize on opportunities to further strengthen prospects for long-term profitable growth.
- Total liquidity remains strong at $1 billion
- Expect to emerge from the current environment stronger and better positioned to compete over the longer-term.
Challenges Ahead
- Anticipate total value added revenue to be down 10%-15% compared to the second quarter pace driven by lower commercial aerospace and business jet sales.
- EBITDA margin in the mid-teens.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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