Shares of Foothill Ranch-based Kaiser Aluminum Corp. slumped Tuesday, a day after industry bellwether Alcoa Inc. kicked off earnings season with a lower than expected loss.
Kaiser’s shares closed down 6% Tuesday on a market value of $840 million.
The company shapes aluminum into custom pieces for the defense, aviation and auto industries and has yearly sales of about $970 million.
Wall Street had been looking to Pittsburgh-based Alcoa to gauge whether an aluminum rebound was holding.
Prices for aluminum collapsed in late 2008 and early 2009 before staging a gradual comeback late last year.
Aluminum prices now are about $1 a pound, up from 60 cents a year ago.
That helped Alcoa bring in higher than expected sales. But it blamed higher energy costs and the weak dollar for its profit shortfall.
Higher aluminum prices should help Kaiser by allowing it to charge more for its products and offset costs.
In early 2009, lower prices proved a double-edge sword: They lowered a key materials cost for Kaiser, but the company couldn’t cut other costs enough to keep up with falling prices for its own products.
Kaiser’s fourth-quarter results are due in February.
Analysts on average expect sales of $222 million, down 32% from a year earlier.
Profits are seen coming in at $5.5 million, down 67% from a year earlier.
