Kaiser Aluminum (NASDAQ: KALU) reported Q3 EPS of $0.33, $0.09 better than the analyst estimate of $0.24. Revenue for the quarter came in at $256 million versus the consensus estimate of $257.48 million.

Outlook

“Looking to the balance of the year, we reiterate our outlook for the second half of 2020 that we communicated on our second quarter earnings call. We continue to 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, offset by continued strength in demand for our defense, automotive and general engineering applications with EBITDA margin in the mid-teens,” said Mr. Harvey.

The Company continues to anticipate a slow recovery for large commercial aerospace applications driven by longer than expected recertification of the 737 MAX, slower recovery in domestic and international air travel and destocking in the supply chain. As a result, the Company expects its value added revenue for commercial aerospace applications to be down approximately 30%-35% from its record 2019 results. This compares to the previously anticipated decline of approximately 20%-25% year-over-year. Longer term, consistent with the outlook published by Boeing and Airbus, the Company anticipates that it could be two to four years before large commercial aerospace demand returns to levels similar to 2019.

Demand for the Company’s defense applications remains strong and is expected to continue in 2021, driven by continued 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.

“Overall, we are well positioned to continue to navigate challenging market conditions and capitalize on opportunities to further strengthen our prospects for long-term profitable growth. Total liquidity remains strong at $1 billion and our disciplined capital allocation priorities and our financial guidelines remain unchanged. Although there remains uncertainty as we look forward, at this time we believe that overall 2020 will be the trough, and as business conditions improve, we expect to emerge from the current environment stronger and better positioned to compete over the longer-term,” concluded Mr. Harvey.

For earnings history and earnings-related data on Kaiser Aluminum (KALU) click here.