Third Quarter 2026
Filed Oct 21, 2026Third-quarter net sales were $1.2 Billion and Adjusted EBITDA was $84 Million; Kaiser maintained its full-year 2026 outlook while expecting Adjusted EBITDA growth toward the lower end of its range.
Conversion Revenue increased 25%, shipments improved 11%, and operating income increased 13%, but Adjusted EBITDA increased 3% and Adjusted EBITDA margin declined to 19.1% from 23.2% amid an approximate $29 million unfavorable metal price lag change and operational cost pressures.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 shipmentsother | 300 million lbs. | – | 11% |
| Q3 2026 net salesGAAP | $1.22B | – | – |
| Q3 2026 Hedged Cost of Alloyed Metalother | ($ 775 million) | – | 57% increase |
| Q3 2026 Conversion Revenuenon-GAAP | $439M | – | 25% increase |
| Q3 2026 net sales realized price per poundother | $ 4.05 | – | – |
| Q3 2026 Hedged Cost of Alloyed Metal per poundother | ($ 2.59) | – | – |
| Q3 2026 Conversion Revenue per poundnon-GAAP | $ 1.46 | – | – |
| Q3 2026 operating incomeGAAP | $55M | – | 13% increase |
| Q3 2026 net incomeGAAP | $31M | – | – |
| Q3 2026 diluted net income per shareGAAP | $ 1.84 | – | – |
| Q3 2026 adjusted operating incomenon-GAAP | $56M | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $84M | – | 3% increase |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 19.1 % | – | – |
| Q3 2026 adjusted net incomenon-GAAP | $32M | – | – |
| Q3 2026 adjusted diluted EPSnon-GAAP | $ 1.89 | – | – |
| Nine months 2026 shipmentsother | 900 million lbs. | – | – |
| Nine months 2026 net salesGAAP | $3.58B | – | – |
| Nine months 2026 Conversion Revenuenon-GAAP | $1.28B | – | – |
| Nine months 2026 operating incomeGAAP | $287M | – | – |
| Nine months 2026 net incomeGAAP | $190M | – | – |
| Nine months 2026 diluted net income per shareGAAP | $ 11.26 | – | – |
| Nine months 2026 adjusted operating incomenon-GAAP | $291M | – | – |
| Nine months 2026 Adjusted EBITDAnon-GAAP | $379M | – | – |
| Nine months 2026 Adjusted EBITDA marginnon-GAAP | 29.6 % | – | – |
| Nine months 2026 adjusted net incomenon-GAAP | $188M | – | – |
| Nine months 2026 adjusted diluted EPSnon-GAAP | $ 11.15 | – | – |
| Nine months 2026 cash provided by operating activitiesGAAP | $248.1M | – | – |
| Nine months 2026 cash used in investing activitiesGAAP | ($ 65.0 million) | – | – |
| Nine months 2026 cash used in financing activitiesGAAP | ($ 73.1 million) | – | – |
| Nine months 2026 Free Cash Flownon-GAAP | $176M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q3 2026 Aero/HS Products net salesDemand remained strong in Aero/HS end markets. | $291.9M | – | – |
| Q3 2026 Aero/HS Products Conversion RevenueDemand remained strong in Aero/HS end markets. | $130.7M | – | – |
| Q3 2026 Packaging net salesThe Company continued to see the favorable impact of transition to higher value coated products in the Packaging end market. | $561.4M | – | – |
| Q3 2026 Packaging Conversion RevenueThe Company continued to see the favorable impact of transition to higher value coated products in the Packaging end market. | $180.1M | – | – |
| Q3 2026 GE Products net salesDemand remained strong in GE Products end markets. | $278.3M | – | – |
| Q3 2026 GE Products Conversion RevenueDemand remained strong in GE Products end markets. | $98.9M | – | – |
| Q3 2026 Automotive Extrusions net salesNo segment-specific driver was provided. | $82.9M | – | – |
| Q3 2026 Automotive Extrusions Conversion RevenueNo segment-specific driver was provided. | $29.4M | – | – |
| Nine months 2026 Aero/HS Products net salesNo period-specific segment driver was provided. | $884M | – | – |
| Nine months 2026 Aero/HS Products Conversion RevenueNo period-specific segment driver was provided. | $397M | – | – |
| Nine months 2026 Packaging net salesNo period-specific segment driver was provided. | $1.64B | – | – |
| Nine months 2026 Packaging Conversion RevenueNo period-specific segment driver was provided. | $511.5M | – | – |
| Nine months 2026 GE Products net salesNo period-specific segment driver was provided. | $799.3M | – | – |
| Nine months 2026 GE Products Conversion RevenueNo period-specific segment driver was provided. | $281.9M | – | – |
| Nine months 2026 Automotive Extrusions net salesNo period-specific segment driver was provided. | $254.4M | – | – |
| Nine months 2026 Automotive Extrusions Conversion RevenueNo period-specific segment driver was provided. | $90.1M | – | – |
Balance of 2026 outlook
- NoteConversion Revenue growth at the high end of its 10% to 15% outlook.
- NoteAdjusted EBITDA growth of 45% to 55% compared to 2025, with results now expected toward the lower end of the range.
Capital returns
- $39 million of cash returned to stockholders through quarterly dividends in the first nine months of 2026.
- Declared a quarterly cash dividend of $0.77 per share on October 13, 2026.
- The quarterly cash dividend will be paid on November 13, 2026 to stockholders of record as of the close of business on October 23, 2026.
What drove it
- Higher average realized sales price and increased shipments drove third-quarter net sales.
- The increase in average selling price reflected a 57% increase in Hedged Cost of Alloyed Metal, which is generally passed through to customers as a function of contracted selling price.
- Shipments improved with capacity added through the Phase VII investment at the Trentwood facility and the prior-year planned partial outage associated with that investment.
- Conversion Revenue increased primarily due to favorable pricing and an improved product mix.
- Demand remained strong in Aero/HS and GE Products end markets.
- The Packaging end market benefited from the transition to higher value coated products.
Concerns
- The year-over-year Adjusted EBITDA comparison was affected by the higher favorable metal price lag reflected in the prior-year quarter, which did not continue in the current quarter.
- The contribution from higher Conversion Revenue offset an approximate $29 million unfavorable metal price lag change from the prior-year period.
- Third-quarter Adjusted EBITDA margin incurred an approximately 640-basis point impact from higher metal consumption costs associated with lower scrap utilization and lower operating efficiencies.
- Lower operating efficiencies primarily reflected the planned partial outage at the Bellwood facility and continued roll coat start-up costs in Packaging.
- For the balance of 2026, results are expected toward the lower end of the Adjusted EBITDA growth range due to planned operational outages, execution performance, customer year-end inventory alignment and metal-related headwinds.
What to watch
- Execution through planned operational outages and the related effect on operating efficiencies.
- Scrap utilization, metal consumption costs, and metal price lag.
- Customer year-end inventory alignment.
- Continued demand in Aero/HS and GE Products.
- The benefit from higher value coated-product transition and roll coat start-up costs in Packaging.
- The transition of Fred Stephan to President and Chief Executive Officer effective November 1, 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $117.3 million as of September 30, 2026, compared with $7.0 million as of December 31, 2025.
- Total liquidity was $687 million as of September 30, 2026, consisting of cash and cash equivalents of $117 million and borrowing availability under the Revolving Credit Facility of $570 million.
- There were no outstanding borrowings under the Revolving Credit Facility as of September 30, 2026.
- Long-term debt, net was $1,038.7 million as of September 30, 2026, compared with $1,059.6 million as of December 31, 2025.
- Net debt leverage ratio was 2.0x as of September 30, 2026, compared with 3.4x at December 31, 2025.
- Adjusted EBITDA of $379 million and cash on hand funded $83 million of working capital, $72 million of capital investments, $37 million of interest payments, and $39 million of cash returned to stockholders through quarterly dividends in the first nine months of 2026.
- Moody's upgraded the Company's credit rating to Ba3 with a stable outlook on October 2, 2026.
Analysis
Kaiser reported third-quarter net sales of $1.2 Billion, Conversion Revenue of $439 Million, and Adjusted EBITDA of $84 Million. The filing attributes the increase in net sales to higher average realized sales price and increased shipments. Shipments improved 11% year over year, with Phase VII capacity at Trentwood and the effect of the prior-year planned partial outage contributing to the volume comparison. Conversion Revenue increased 25%, primarily on favorable pricing and improved product mix.
Demand remained strong in Aero/HS and GE Products, while Packaging continued to benefit from a transition to higher value coated products. The sales increase also reflected a 57% increase in Hedged Cost of Alloyed Metal, which the company generally passes through under contracted selling prices. This pass-through effect is important to the revenue result because net sales reached $1.2 Billion while Conversion Revenue, the company's non-GAAP measure excluding Hedged Cost of Alloyed Metal, was $439 Million.
Profit performance was more constrained than the Conversion Revenue growth. GAAP operating income increased 13% to $55 Million, while Adjusted EBITDA increased 3% to $84 Million and Adjusted EBITDA margin declined to 19.1% from 23.2%. Kaiser cited an approximate $29 million unfavorable metal price lag change from the prior-year quarter, approximately a 640-basis point margin impact from higher metal consumption costs associated with lower scrap utilization, and lower operating efficiencies. The operational pressure reflected the planned partial outage at Bellwood and continuing roll coat start-up costs in Packaging.
Cash generation and liquidity strengthened over the nine-month period. Cash provided by operating activities was $248.1 million, Free Cash Flow was $176 Million, cash and cash equivalents were $117.3 million at September 30, 2026, and total liquidity was $687 million. Net debt leverage improved to 2.0x from 3.4x at December 31, 2025. The company funded $83 million of working capital, $72 million of capital investments, $37 million of interest payments, and $39 million of dividends with Adjusted EBITDA and cash on hand.
Kaiser maintained its full-year outlook for Conversion Revenue growth at the high end of 10% to 15% and for Adjusted EBITDA growth of 45% to 55% compared to 2025. However, management now expects EBITDA growth toward the lower end because of planned operational outages, execution performance, customer year-end inventory alignment, and metal-related headwinds. Leadership will also change on November 1, 2026, when Fred Stephan succeeds Keith A. Harvey as President and Chief Executive Officer.
Management, verbatim
Our results reflected continued strength in customer demand, improved Conversion Revenue, and favorable pricing and product mix. While reported EBITDA increased modestly year-over-year, the comparison was significantly affected by the higher favorable metal price lag reflected in the prior year quarter, which, as expected, did not continue in the current quarter. Despite this headwind, as well as other operational challenges that impacted third quarter margins, the business delivered meaningful underlying improvement year over year.
Keith A. Harvey, Chairman, President and Chief Executive Officer
As we look toward 2027 and beyond, customer visibility continues to improve and conversations are increasingly focused on future growth, long-term supply and expanding capacity requirements. With the investments we have made across the portfolio and the strength of our market positions, we believe Kaiser is exceptionally well positioned to capitalize on the opportunities ahead.
Keith A. Harvey, Chairman, President and Chief Executive Officer
Not in the filing
stated, not guessed- No gross margin was reported.
- No quarterly operating cash flow was reported.
- No quarterly free cash flow reconciliation or prior-year free cash flow was reported.
- No share repurchases were reported.
- No previous-release outlook was provided, so comparison of actual results with prior guidance is unavailable.
- No forward guidance for net sales, gross margin, operating expenses, tax rate, capital expenditures, operating cash flow, or free cash flow was provided.
- No prior-quarter comparisons were reported for the key financial metrics.
- No segment-specific year-over-year or sequential percentage changes for net sales or Conversion Revenue were reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.