Kaiser Aluminum Net Profit Soars on Power Sales
HOUSTON (Reuters) - Kaiser Aluminum Corp. (NYSE:KLU) on Tuesday reported that its first-quarter net profit soared more than tenfold due to a one-time gain from the resale of power, which more than offset the impact of lower sales and prices in its main business of producing aluminum.
The Houston-based company said net profit was $119.6 million, or $1.50 per share, against $11.7 million, or 15 cents, in the year-earlier period.
The profit included a pre-tax gain of $228.2 million, or $1.75 per share, from its sales of previously contracted power back to the Bonneville Power Administration in Portland, Ore., as it ramped down production of aluminum. As electricity costs have risen in the Pacific Northwest, it has become uneconomic for Kaiser to produce aluminum and highly profitable to resell the electricity.
Before those sales and other one-time gains, Kaiser suffered a loss of $9.1 million, or 12 cents per share, a reversal from a profit of $4.1 million, or 5 cents, in the year-earlier period.
The most recent results were slightly better than expected, as analysts' predictions ranged from a loss of 13 cents to a loss of 17 cents before the power sales and other one-time items, with a consensus of 15 cents, according to research firm Thomson Financial/First Call.