Kaiser Aluminum (NASDAQ:KALU) executives said the company ended 2025 with continued momentum, delivering record adjusted EBITDA and forecasting additional growth in 2026 as major capital projects shift from the startup phase to returns harvesting.
Fourth-quarter momentum caps a record 2025
Chairman, President and CEO Keith Harvey said fourth-quarter results “continued to build on the momentum we’ve established throughout the year,” marking the company’s fifth consecutive quarter ahead of internal expectations. Harvey added that Kaiser exceeded the full-year outlook it provided in October, citing moderating startup costs versus the prior two quarters and metal pricing that remained a tailwind.
Sales, shipments, and end-market performance
EVP and CFO Neal West reported full-year net sales of $3.4 billion. After adjusting for hedge costs of alloy metal of $1.9 billion, conversion revenue was $1.5 billion, which West said was relatively consistent with 2024.
Total shipments were 1.1 billion pounds, down 64 million pounds, or 5%, from 2024. West detailed performance across end markets:
- Aerospace and high-strength: Conversion revenue of $457 million, down $73 million (about 14%), driven primarily by a 16% shipment decline tied to commercial aerospace OEM destocking of plate products and the impact of the planned Phase VII investment in the second half. West said OEM destocking began to ease exiting the fourth quarter, while demand in business jet, defense, and space remained strong.
- Packaging: Conversion revenue of $544 million, up $54 million (about 11%), driven by a planned transition to coated products as the company finalized commissioning of a new coating line. Shipments declined by 32 million pounds during the transition due to a slower-than-anticipated ramp, but conversion revenue per pound increased, supported by strong underlying demand.
- General engineering: Conversion revenue of $331 million, up $14 million (about 4%), supported by a 6% increase in shipments. West cited tariff-driven reshoring activity and KaiserSelect quality attributes as supporting volumes and pricing.
- Automotive: Conversion revenue of $122 million, up 2% year over year, despite a 6% decline in shipments. West said high interest rates and tariff-related customer uncertainty weighed on industry shipments, while improved pricing and mix helped offset lower volume.
Profitability, non-recurring items, and cash flow
Reported operating income for 2025 was $189 million. After adjusting for approximately $1 million of non-run rate income, adjusted operating income was $188 million, up $63 million from 2024. West noted operating income included a $6 million increase in depreciation tied to the Trentwood Rolling Mill Phase VII expansion and the new coating line commissioning at Warrick.
Net income was $113 million, or $6.77 per diluted share, compared with $66 million, or $4.02 per diluted share, in the prior year. After adjusting for net pre-tax non-run rate income of about $15 million—primarily legacy land sales and insurance settlements—adjusted net income was $100 million, or $6.03 per diluted share, versus $60 million, or $3.67 per diluted share, in 2024.
Adjusted EBITDA was $310 million, up about $69 million from 2024. Adjusted EBITDA margin as a percentage of conversion revenue improved to 21.3%, roughly 470 basis points above 2024’s 16.6%. West said Kaiser incurred about $47 million of non-recurring operating and other costs in 2025, largely related to startup of the Warrick coating line and a planned Trentwood outage, which were “more than offset” by metal lag gains from rising metal prices.
On liquidity, West said the company ended 2025 with approximately $7 million in cash and about $540 million of net borrowing availability under its revolving credit facility, for total liquidity of $547 million. He highlighted the October extension of the $575 million revolver to October 2030 and a $500 million senior notes offering due 2034 completed in November. Proceeds, along with revolver borrowings and cash, were used to redeem 2028 notes, extending the maturity profile. West said annual senior notes interest costs are fixed at $54 million, and net leverage ended the year at 3.4x, improving from 4.3x at the end of 2024.
Capital expenditures were $137 million in 2025, following completion of major growth projects at Warrick and Trentwood. West also pointed to a $168 million working capital usage in 2025, which he attributed directly to rising metal prices. For 2026, Kaiser expects capex of $120 million to $130 million and free cash flow of $120 million to $140 million, subject to metal-price-driven working capital impacts.
The company returned about $51 million to shareholders through dividends in 2025, its 19th consecutive year of dividend payments. West noted the board declared a quarterly dividend of $0.77 per share on Jan. 13.
2026 outlook: Growth led by aerospace recovery and packaging mix shift
Harvey said 2026 should be a record year for both conversion revenue and EBITDA, as the company moves from executing large-scale projects to “harvesting returns through margin expansion.”
Key elements of Kaiser’s 2026 end-market outlook included:
- Aerospace/high-strength: Shipments expected up 10% to 15%, with conversion revenue up about 5% to 10%. Harvey said this implies conversion revenue per pound consistent with the first-half 2025 run rate, as the second half benefited from a richer extrusion mix during plate line upgrades. He reiterated that commercial OEM destocking has tempered near-term sell-through of plate products but is expected to largely dissipate by year-end, if not earlier.
- Packaging: Shipments targeted up 5% to 10% and conversion revenue up 15% to 20%. Harvey said the fourth coating line at Warrick is fully commissioned and qualified and is progressing toward full production, with coated volumes at roughly 75% and growing. Kaiser plans to operate around 80% utilization in 2026 while continuing to fine-tune quality and reliability.
- General engineering: Shipments and conversion revenue expected to grow about 3% to 5% year over year, supported by improving GDP and strengthening semiconductor demand, with potential upside given customer inventory levels at multiyear lows.
- Automotive: Shipments and conversion revenue expected to decline about 5% to 10% due to planned outages—most notably at Bellwood—associated with retooling rather than underlying demand. Harvey said the company is seeing faster-than-anticipated demand tied to a shift toward internal combustion engine vehicles in light trucks and SUVs, prompting facility retooling and incremental capacity additions.
In the Q&A, Harvey said the aerospace outlook reflects a return to full plate capacity at Trentwood following the 2025 outage, which he said disproportionately reduced second-half shipments and temporarily boosted mix toward higher-priced extrusions. On packaging, he pointed to improving throughput and qualifications at the new coating line and said the company can sell “every pound we can make,” with food packaging described as stronger than beverage.
Harvey also addressed capital spending, saying the higher 2026 capex range versus earlier expectations was “purely” driven by the automotive opportunity. He added that Kaiser has seen “absolutely no demand destruction” across product lines and said the company’s 2026 outlook assumes operational gains rather than a repeat of 2025’s metal-price tailwinds, with any additional pricing benefit potentially providing upside to the initial outlook.
About Kaiser Aluminum (NASDAQ:KALU)
Kaiser Aluminum Corporation is a U.S.-based producer of semi‐fabricated aluminum products, serving a diverse range of industrial and specialty markets. The company’s offerings include extruded, rolled, and forged aluminum products designed to meet stringent performance requirements in sectors such as aerospace, automotive, defense, electronics, and general engineering. By focusing on high‐value applications, Kaiser Aluminum aims to deliver lightweight, durable solutions that contribute to efficiency and innovation across its customer base.
Operationally, Kaiser Aluminum maintains a network of smelters, extrusion plants, and rolling mills located primarily in North America.
