Kaiser Aluminum slips into loss in third quarter
(UPDATE: adds company comment and background details, and updates stock price)
HOUSTON, Oct 30 (Reuters) - Kaiser Aluminum Corp. (NYSE:KLU - news) on Tuesday posted a third-quarter loss on curtailed aluminum production and soft demand, reversing a year-ago profit.
Excluding all unusual items, Kaiser lost $24.7 million, or 31 cents a share, compared with a profit of $2.1 million, or 3 cents a share, in the year-ago period. Wall Street had expected the company to lose between 26 cents and 31 cents a share, with a consensus estimate of 28 cents, according to tracking firm Thomson Financial/First Call.
Including a pre-tax gain of $163.6 million from the sale of a stake in an alumina refinery and restructuring charges, Kaiser posted net income of $68.4 million, or 85 cents a share, in the latest quarter.
The aluminum industry has been crippled by a deepening manufacturing recession and weak prices. Kaiser's net sales slipped about 21 percent to $430.3 million from $545.2 million a year ago.
Chief Executive Jack Hockema said the company has not seen any significant upturn in its key markets.
``Our third-quarter operating results reflect weak commodity prices, continued soft demand for fabricated products, and the impacts of the ongoing curtailment of the company's Pacific Northwest smelters,'' Hockema added.
Kaiser said, however, fourth-quarter results would be aided by higher operating rates and lower production costs at its Gramercy, Louisiana, alumina refinery. The company said it expected the refinery to be fully operational by the end of 2001, or in early 2002. The Gramercy refinery attained an average operating rate of 78 percent in the third-quarter, the company said.
Shares in Kaiser fell 5 cents, or 2.44 percent, to $2 in morning trading on the New York Stock Exchange. In the third-quarter, company shares tumbled 35.4 percent in the quarter, compared with a drop of about 15 percent in the broader S&P 500 Index (^SPX - news) and a decline of almost 25 percent in the S&P Metals Index