Kaiser Aluminum Raises Outlook as Earnings Climb
Second-quarter net sales rose 53% to $1.257 billion on higher shipments and realized prices.
Kaiser Aluminum (KALU), a maker of semi-fabricated specialty aluminum products, posted record adjusted EBITDA of $166 million, more than double the year-earlier result and up from $129 million in the first quarter.
The quarter extended a five-quarter earnings climb that began with adjusted EBITDA of $68 million in the second quarter of 2024. Adjusted EBITDA margin reached a record 38.1%, compared with 18.1% a year earlier and 31.8% in the first quarter.
Net sales increased 14% sequentially, while shipments rose 6% from a year earlier to 305.7 million pounds. GAAP net income increased to $96.8 million, or $5.72 a share, from $23.2 million, or $1.41 a share. Adjusted earnings rose to $5.53 a share from $1.21.
Packaging drove the end-market gains as shipments increased 10% and conversion revenue rose 34% to $174.0 million, reflecting stronger pricing and a greater mix of higher-value coated products. Aero and high-strength conversion revenue increased 7% as aerospace production strengthened and destocking eased, while general-engineering conversion revenue rose 12%.
Companywide conversion revenue reached a record $437 million, up 17% from a year earlier and 8% from the first quarter. Conversion revenue per pound increased to $1.43 from $1.30, helping offset higher alloyed-metal costs. Favorable metal-price lag contributed about $27 million to adjusted EBITDA, below the first quarter's $36 million contribution.
Stronger cash generation also reduced leverage. First-half operating cash flow more than doubled to $147.4 million as investing outflows declined, and net debt leverage improved to 2.1 times from 2.8 times after the first quarter and 3.4 times at the end of 2024.
Kaiser raised its full-year adjusted EBITDA outlook to growth of 45% to 55% and expects conversion revenue at the high end of its previous 10% to 15% growth range. The forecast assumes metal-price lag is neutral for the rest of 2026, leaving operating performance to carry the outlook after the first half's metal-related tailwind.