Kaiser Aluminum (NASDAQ: KALU) reported Q4 EPS of $0.20, $0.71 worse than the analyst estimate of $0.91. Revenue for the quarter came in at $806 million versus the consensus estimate of $750.13 million.

2022 Outlook:

The company is well-positioned for continued long-term growth with a diversified portfolio and strong secular growth trends in each of its served end markets. Notwithstanding near-term challenges, the fundamentals of aerospace, automotive and general engineering end markets are solid, and the company expects to deliver significant margin expansion to further enhance long-term profitability for the packaging business. The company remains confident around the timing of the recovery in commercial aerospace, and is optimistic that as semiconductor chip shortages are alleviated, automotive production will ramp back up and program launches will resume. The company also expects costs and operating efficiencies will continue to improve as its magnesium supply chain challenges and Warrick’s metal supply issues are resolved.

For the full year 2022, the company anticipates total value added revenue to be up 20% to 25% year-over-year due to further strengthening in demand for its products across all major markets and the benefit of a full year of the packaging operations. Consolidated adjusted EBITDA margin is expected to improve to 17% to 20% for the full year 2022, strengthening through the year, as supply chain issues are resolved, operations and efficiencies improve, costs normalize and the Warrick integration process is completed.

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. The company anticipates total capital investment in 2022 will be approximately $200 million, of which approximately 60% is focused on growth initiatives, primarily reflecting investment in the new roll coat line at the Warrick facility.

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