Kaiser Aluminum's Third-Quarter Ebitda Collapses From Record

The Tip Desk · October 27, 2026 · 3 min read

Adjusted EBITDA fell to $84 million from a record $166 million as metal price lag reversed and the company kept its 2026 outlook.

Kaiser Aluminum Corporation (KALU), a producer of semi-fabricated specialty aluminum, reported adjusted EBITDA of $84 million in the third quarter of 2026, down from a record $166 million in the second quarter, as a swing in metal price lag and operational costs compressed the margin to 19.1% from 38.1%.

The company said the year-over-year comparison was significantly affected by a higher favorable metal price lag in the year-ago quarter that, as expected, did not continue. Adjusted EBITDA included about $1.0 million of unfavorable metal price lag in the third quarter, versus about $27.0 million favorable in the second quarter and about $28.0 million favorable a year earlier. Higher Conversion Revenue helped offset an approximate $29 million unfavorable metal price lag change from the prior-year period.

Net sales were $1.21 billion, up 44% from $844 million a year earlier, as Hedged Cost of Alloyed Metal rose 57% and shipments rose 11% to 300 million pounds. The company said the volume increase reflected capacity added with the Phase VII investment at Trentwood and a planned partial outage in the year-ago period. Shipments were down from 306 million pounds in the second quarter.

Conversion Revenue was $439 million, up 25% from $351 million a year earlier, primarily from favorable pricing and improved product mix, and little changed from $437 million in the second quarter. Demand remained strong in Aero/HS and GE Products, and the company continued to see a favorable shift to higher-value coated products in Packaging.

Aero/HS shipments were 59.4 million pounds, with Conversion Revenue of $130.7 million. Packaging shipments were 153.0 million pounds and Conversion Revenue $180.1 million. GE Products shipments were 67.4 million pounds and Conversion Revenue $98.9 million. Automotive Extrusions shipments fell to 20.4 million pounds and Conversion Revenue declined to $29.4 million.

The company also incurred about a 640-basis point Adjusted EBITDA margin impact from higher metal consumption costs associated with lower scrap utilization, plus lower operating efficiencies primarily reflecting the planned partial outage at Bellwood and continued roll coat start-up costs in Packaging.

Net income was $31 million, or $1.84 a share, versus $97 million and $5.72 a share in the second quarter. Adjusted net income was $32 million, or $1.89 a share. Operating income was $55 million.

For the nine months ended September 30, 2026, adjusted EBITDA was $379 million. Operating cash flow was $248 million and free cash flow $176 million. Cash and cash equivalents rose to $117 million from $7 million at year-end 2025, and liquidity was $687 million, including $570 million of unused revolving credit. Net debt leverage improved to 2.0x from 3.4x at December 31, 2025. On October 2, 2026, Moody’s upgraded the company to Ba3 with a stable outlook.

The company declared a quarterly dividend of $0.77 a share, payable November 13, 2026. For the balance of 2026 it continues to expect Conversion Revenue growth at the high end of its 10% to 15% outlook. It is maintaining its Adjusted EBITDA growth outlook of 45% to 55% versus 2025, with results now expected toward the lower end of that range due to planned operational outages, execution performance, customer year-end inventory alignment and metal-related headwinds.

Fred Stephan is set to succeed Keith A. Harvey as President and Chief Executive Officer effective November 1, 2026. Harvey will become Executive Chairman and remain as a special advisor through October 31, 2027.