Kaiser Aluminum Corp. - Aggressive Growth

Kaiser Aluminum Corp (KALU) easily topped expectations, which sent full-year estimates higher. Additionally, the company is the top-rated in an unexpectedly hot industry.

Company Description

Kaiser Aluminum makes semi-fabricated aluminum products for aerospace, general engineering, custom automotive and industrial uses.

Earnings Double

On Aug 2 Kaiser reported quarterly results that included earnings of 71 cents per share, up from 32 cents a year ago and well ahead of the Zacks Consensus Estimate of 39 cents.

Sales came in at $282 million, up 22% year over year and 5% better than the previous quarter.

Long-Term Outlook

Chairman and CEO, Mr. Kockema, said "the long-term fundamentals of our business remain solid, and we are pleased with how the Company is positioned. We foresee strong long-term growth in demand for our aerospace and automotive applications, and we have yet to fully realize the benefits of significant capital investments throughout our manufacturing platform,

Analysts Like What They Hear

After the earnings news, Kaiser analysts revised their full-year projections. Forecasts for this year now average $2.13, up from $1.64, projecting a 22% growth rate. Next year's Zacks Consensus Estimate is $2.65, up from $2.42, fro a 24% growth rate.

Hot Industry

Metal fabricators are in the top 10% of industries right now, according to Zacks.com, and Kaiser highest amongst the 20 companies in the area. The company has a net profit margin of 5.4%, twice the industry average.

Kaiser's return on equity is an impressive 15.7%, relative the norm of just under 7%.

The Chart

Many other companies have seen their full-year estimates rebound to pre-recession levels already. However KALU is just starting to turn the corner, so this could be a great long-term entry point.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service
 
KAISER ALUMINUM (KALU): Free Stock Analysis Report
 
Zacks Investment Research