Aluminum Corp. saw profits narrow in the second quarter but
expects improved demand in the second half of the year as
ramped-up automotive and aerospace activity compensates for
traditional seasonal weakness.
The Foothill Ranch,
Calif.-based aluminum company posted net income of $18.6
million for the three months ended June 30, down 11.4 percent
from $21 million in the same period last year as sales dipped
4.7 percent to $328.9 million, according to data released after
the close of markets July 24.
first-half net income increased 6.2 percent to $52.1 million
from $47.5 million in the first six months of 2012 despite a
6.2-percent decline in sales to $666.3 million.
Kaiser continued to
suffer from an "inventory overhang" in aerospace applications
in the second quarter resulting from a "supply chain
over-reaction" in late 2011 and early 2012 to airframe
manufacturer readiness initiatives, Kaiser chairman, president
and chief executive officer Jack Hockema said in a statement.
But that situation should "abate somewhat" in the second half
of 2013 while overall aerospace demand remains strong, he
"We continue to be
very optimistic regarding the longer-term outlook for our
business. In the nearer term, we see signs that the various
headwinds in our end markets are moderating," Hockema said.
"Our long-term value proposition remains intact."
That optimism is in
large part because of expected strong demand for aerospace and
automotive applications, Hockema said, noting that Kaiser
continues to pursue growth initiatives aimed at meeting that
demand, including boosting heat-treat plate capacity.
But while the future
may be bright for value-added products, the results for the
first half of the year were mixed, Kaiser indicated, noting
that value-added revenue fell 2.4 percent to $371 million in
the first half from $380 million a year earlier. The drop
reflected the inventory overhang in the aerospace supply chain
as well as "ongoing soft demand" for general industrial
applications and lower automotive demand for aluminum
extrusions for anti-lock braking systems, the company said.