Kaiser Aluminum (NASDAQ: KALU) reported Q3 EPS of $1.07, $0.09 worse than the analyst estimate of $1.16. Revenue for the quarter came in at $336.4 million versus the consensus estimate of $354.7 million.

Outlook

“We expect normal seasonal demand weakness in the fourth quarter to be partially offset by strong throughput and improved manufacturing cost efficiency at Trentwood following the extended outage and equipment downtime in the third quarter. In addition, we anticipate some improvement in cost efficiency in our automotive operations, despite volatile and unpredictable order patterns continuing to present a challenge early in the fourth quarter. Routine major maintenance expense in the fourth quarter is expected to bring the total second half 2015 impact for planned maintenance and related costs to approximately $8-$10 million higher than the first half of 2015 with approximately $6 million of the impact already incurred in the third quarter," said Mr. Hockema.

“Overall, we continue to expect 2015 value added revenue at the high end of the outlook for 7%-9% year-over-year growth driven by strong demand for aerospace and automotive applications in addition to some benefit from improved sales margins and lower contained metal costs.

“As we gain more visibility into 2016, we expect solid year-over-year value added revenue growth driven once again by higher shipments of aerospace and automotive applications. Our heat treat plate order book is strong, and our lead times for these products continue to extend well into the first half of 2016. Demand for our automotive extrusion applications remains on a strong growth trajectory as we continue to have numerous new launches and expect another year of double-digit value added revenue growth. Overall we expect another year of strong top-line growth in 2016 and continued improvement in manufacturing cost efficiencies.

“We remain very well positioned for continued long-term growth facilitated by strong secular demand trends for aerospace and automotive applications. With future investments in production capacity, efficiency, and quality, we expect to continue generating shareholder value by capitalizing on these growth opportunities,” concluded Mr. Hockema.

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