Southern California aluminium firm Kaiser Aluminum reported fourth quarter and full year results last week, besting quarterly EPS estimates for the third time in four quarters.

In the fourth quarter Kaiser shipped 159 million pounds of product, identical with the prior quarter and better by six million pounds on the year. Net sales for the quarter totaled US$389 million, lower by US$4 million on the quarter but better than last year’s fourth-quarter sales of US$353 million. Kaiser chalks up the rise over last year’s total to a 4-percent bump in shipments and a 6-percent increase in average selling price.

Kaiser showed a net income of US$24 million in the fourth quarter, a rise of US$2 million over the prior quarter and reversing a loss of US$15 million in last year’s final quarter. Adjusted EBITDA figured at US$55 million, up by US$8 million on the quarter and US$9 million on the year. Adjusted net income figured at US$30 million, good for a US$6 million rise on the quarter and a US$10 million bump on the year.

Per the firm, the fourth quarter was significantly impacted by an incremental non-cash tax expense of US$37 million, which was the product of federal tax reform legislation that revalued Kaiser’s deferred tax assets.

For the full year, Kaiser shipped 652 million pounds of product, better by 26 million pounds than the prior year. Net sales for the year totaled US$1.586 billion, besting the previous year’s net sales of US$1.398 billion, thanks largely to a 4-percent rise in shipments and a 9-percent bump in average selling price.

Kaiser’s net income in 2018 came to US$92 million, more than doubling 2017’s net income of US$45 million. Last year saw Kaiser turn in an adjusted EBITDA of US$205 million, a US$6 million gain on the year. Net income for the year came to US$109 million, US$21 million above 2017’s total.

“Kaiser delivered excellent results in 2018, consistent with the outlook communicated at the beginning of the year and despite persistent headwinds from aerospace supply chain destocking, high contained metal and freight costs and Section 232 tariffs,” explained Kaiser’s Chairman and CEO Jack A. Hockema.

“For the full year 2018 we achieved record shipments, up 4% year-over-year, and value added revenue, up 5%, driven by strong demand. Record commercial airframe builds drove underlying demand growth, and aerospace supply chain destocking began moderating in the second half 2018, further enhancing demand growth. Aluminum extrusion content continued to increase on solid North American automotive builds, and demand for general engineering and industrial products remained strong throughout the year with normal second half seasonal weakness. Adjusted EBITDA improved year-over-year as sales volume and mix provided a benefit partially offset by an adverse pricing impact due to unrecovered high contained metal and freight costs and of Section 232 tariffs.”

“Our second half 2018 results were a record for the last six months of a year,” concluded Hockema. “Aerospace supply chain destocking began to moderate, and underlying commercial airframe demand was strong as build rates continued to grow. In addition, we realized the full impact of proactive price increases implemented during the second quarter of 2018. We have initiated additional price increases in 2019 for certain non-contract general engineering and aerospace applications and, with growing demand and improving prices, we have positive momentum as we begin 2019.”