On October 25, 2023, Kaiser Aluminum Corp (KALU, Financial) released its third-quarter financial results for 2023. The company reported net sales of $744 million and an adjusted EBITDA of $48 million, marking a $19 million increase over the prior year period. The net income for the quarter was $5 million, with an adjusted net income of $7 million. The company's aerospace conversion revenue was in line with expectations, reflecting strengthened demand. KALU maintained strong liquidity of $574 million as of September 30, 2023.
Financial Performance and Challenges
Despite facing a challenging market, KALU's third-quarter results were largely within expectations. The company's operations have been recovering to meet or exceed pre-pandemic peak levels, particularly in the aerospace products segment. However, general engineering demand remained soft, and the demand for packaging appeared to be slowing down. The company also faced market headwinds such as rising inflationary costs and short-term demand issues impacting operational efficiencies.
Financial Highlights
Net sales for Q3 2023 modestly decreased to $744 million compared to $749 million in the prior year period, reflecting a 6% increase in shipments offset by a 7% decrease in average selling price per pound. The conversion revenue for the third quarter 2023 was $357 million, reflecting an 11% increase compared to the prior year period. The reported net income for the third quarter 2023 was $5 million, or $0.34 income per diluted share, compared to net income and income per diluted share of $3 million and $0.16, respectively, in the prior year period.
Outlook for Q4 2023
KALU remains well positioned in the current mixed demand environment as a key supplier in diverse end markets with multi-year contracts with strategic partners. The company expects commercial aerospace demand to continue to strengthen and meet or exceed record pre-pandemic 2019 levels by the end of 2023. However, shipments in packaging are expected to decline due to destocking and anticipated fourth quarter seasonality. The company's capital investment plans remain focused on supporting demand growth through capacity expansion, sustaining its operations, enhancing product quality, and increasing operating efficiencies.
Conference Call Information
Kaiser Aluminum Corporation will host a conference call on Thursday, October 26, 2023, to discuss its third quarter results. A link to the simultaneous webcast can be accessed on the Company’s website at https://investors.kaiseraluminum.com.
Explore the complete 8-K earnings release (here) from Kaiser Aluminum Corp for further details.
