Aug. 2, 2017
Kaiser's Income Declines in First Quarter
Kaiser Aluminum Corp., Foothill Ranch, Calif., reported net income of $5 million in the second quarter, a decline from the $26 million posted in the same period in 2016. First-half net income of $41 million was down 17.3 percent from the previous year.
Net sales of $356.0 million increased 6.2 percent from the second quarter of 2016, and were flat the previous quarter. Six-month net sales of $323.0 million were up 5.0 percent from the previous year.
Second-quarter shipments were up 3.1 percent to 160 million pounds, but down 2.4 percent from the prior quarter. Year-to-date shipments increased 2.9 percent.
"Our second-quarter 2017 results exceeded our expectation for the quarter as Trentwood performed significantly better than anticipated despite project-related construction activity, major equipment outages and inefficient material flow. In addition to Trentwood's strong performance, our extrusion/drawn facilities continued to achieve solid underlying manufacturing efficiency further enhancing our second quarter operating performance," said Jack A. Hockema, chairman and CEO.
"Industry dynamics remained largely unchanged from the first quarter. Despite project-related throughput constraints at Trentwood and continued destocking in the commercial aerospace supply chain, total shipments increased 3 percent year over year. Reduced aerospace shipments were more than offset by year-over-year growth in shipments for automotive extrusions and general engineering applications driven by new automotive program launches and strong industrial demand,” Hockema said.
However, a lower value-added product mix, competitive price pressure and higher contained metal costs continued to drive the year-over-year decline in total value-added revenue. Partially offsetting margin pressure from lower sales prices were favorable price spreads for scrap raw material purchases.
Work continues on Kaiser’s Trentwood modernization project, and the company expects to complete the heat-treat furnace outage and restore normal operations and material flow during the third quarter.