Kaiser Aluminum (NASDAQ: KALU) reported Q1 EPS of $0.64, $0.05 better than the analyst estimate of $0.59. Revenue for the quarter came in at $324 million versus the consensus estimate of $337.35 million.

Outlook:

“Prior to completion of the acquisition, our outlook for the full year 2021 anticipated total value added revenue up 5% to 10% year-over-year and an adjusted EBITDA margin comparable to 2020 driven by strong growth in automotive, defense and general engineering applications. With the acquisition of Warrick now completed, we have updated the full year outlook for 2021 to reflect approximately $375 million to $400 million of additional value added revenue for the remainder of the year and reiterate our expectation of an adjusted EBITDA margin comparable to 2020,” stated Mr. Harvey.

The Company anticipates aerospace/high strength demand to continue improving through the balance of the year driven by growth in defense related programs and business jet production. Demand for the Company’s products related to large commercial airframe production appears to have stabilized with continued recovery through 2023-2024.

Demand for the Company’s automotive applications remains robust with multiple new programs successfully launched and underway. The Company has experienced slight delays in some programs mainly due to the semiconductor chip shortage anticipated to continue through the first half of 2021. If the shortage is not recoverable in the second half 2021, automotive value added revenue for the year could be slightly lower than previously anticipated.

Strength in demand for the Company’s general engineering applications continues to reflect strong underlying demand driven by growth in semiconductor and automotive applications, strong service center demand, and restocking in the supply chain as lead-times from mills continue to extend.

The outlook for aluminum packaging is very promising with favorable demand and industry dynamics. North American can demand was up 5% year-over-year in 2020 and projected to increase an additional 3% to 5% in 2021 and beyond. Can stock demand is driven by sustainability trends and the secular shift from plastic to aluminum in the packaging industry and growing consumer preference for crafted beer and spiked seltzer. In addition, capacity for beverage and food can stock has shifted from aluminum packaging into other end markets including automotive and other industrial applications

“As we look forward, we are well positioned for continued long-term growth with a diversified portfolio and strong secular growth trends in each of our served end markets:

• Packaging with sustainability-driven conversion from plastics in beverage and food can applications,
• Aerospace/high strength with a return in global passenger air travel,
• Automotive extrusions with continued light weighting of vehicles to achieve fuel economy, and
• General engineering end markets with strong demand for domestic supply of our broad offering of fabricated products.

“We have identified multiple expansion opportunities to accelerate our growth in our served markets and we have solid liquidity and financial flexibility to support these opportunities for profitable growth. We anticipate providing additional details around our investment plans during our July earnings call, if not earlier,” concluded Mr. Harvey.

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