Dj Kaiser Aluminum Corporation, Inst Holders, 3Q 2024 (Kalu)

TriMas Corporation’s TRS shares gained 10% since it reported its third-quarter 2024 earnings on Nov. 4. TriMas reported third-quarter 2024 adjusted earnings per share (EPS) of 43 cents (including non-cash compensation expenses), which missed the Zacks Consensus Estimate of 57 cents. The bottom line declined 31.7% from the prior-year quarter due to weak demand in the Specialty Products segment and delayed shipments due to a 10-week work stoppage at an aerospace location.

Despite weaker-than-expected earnings, TRS shares were buoyed by some positive developments. While sales declined in the Specialty Products segment, it achieved a sequential 660 basis point margin improvement attributed to the cost reduction actions implemented in the second quarter of 2024. TriMas noted increased quoting and bookings for the segment, indicating a recovery in its top line in 2025, which, combined with the cost containment, will likely result in improved margins for the segment next year. Also, in the packaging segment, the food and beverage end markets posted positive year-over-year growth for the first time in 2024. The recovery in these key markets bodes well for the segment.

TriMas Corporation Price, Consensus and EPS Surprise

TriMas Corporation price-consensus-eps-surprise-chart | TriMas Corporation Quote

TriMas also inked a deal to acquire Germany-based GMT Aerospace, a manufacturer of tie rods used in a range of structural aerospace applications. The acquisition, expected to close in the first quarter of 2025, will add the first manufacturing location in Europe for the aerospace segment. GMT Aerospace’ annualized sales are approximately EUR20 million.

Including the impacts of one-time items, the company reported an EPS of 6 cents compared with the year-ago quarter's 40 cents.

The company's revenues decreased 2.5% year over year to $229 million. Organic sales growth in packaging and aerospace product lines was offset by lower market demand in the Specialty Products segment. Overall, organic sales fell 2.3% in the quarter. The top line missed the Zacks Consensus Estimate of $241 million.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

TriMas’ Q3 Costs & Margins

The cost of sales fell 1% year over year to $178 million in the reported quarter. Gross profit declined 7.6% year over year to $51.7 million. The gross margin was 22.5% compared with 23.8% in the prior-year quarter.

Selling, general and administrative expenses rose 37.7% year over year to $44.5 million. Adjusted operating profit declined 18.7% year over year to $23 million. The adjusted operating margin contracted to 9.9% from the prior-year quarter’s 11.8%.

TRS Q3 Segment Performances

Packaging: Net sales came in at $130 million compared with the year-ago quarter’s $117 million. The upside was driven by organic growth within the beauty & personal care, food & beverage, industrial and home care end markets.

The figure was higher than our estimate of $126 million. Organic sales rose 12.3% year over year. Adjusted operating profit fell 2.5% year over year to $19 million in the reported quarter. We had projected the segment’s adjusted operating profit at $19 million.

Aerospace: Net sales increased 4.8% year over year to $71 million, attributed to stronger demand. The figure missed our estimate of $73 million. Organic sales rose 4.8%. The segment’s results in the quarter were impacted by delayed shipments from a 10-week work stoppage at one of its facilities, which has since been resolved.

The segment reported an adjusted operating profit of $9 million, up 4.6% year over year. We had projected the segment’s adjusted operating profit at $9 million.

Specialty Products: The segment's revenues decreased 44.8% year over year to $28 million due to lower demand. Revenues were lower than our estimate of $44 million. Operating profit fell 77.6% year over year to $2.4 million. We had projected the segment’s adjusted operating profit at $6.4 million.

TriMas’ Q3 Cash Flow & Balance Sheet Updates

In the first nine months of 2024, TriMas repurchased approximately 771,067 of its outstanding common stock for $19.3 million. The company generated $22 million of adjusted cash flow from operations in the quarter under review compared with $31 million in the prior-year quarter.

TRS ended the quarter with $26.9 million of cash on hand compared with $34.8 million reported at the end of 2023. The company had $210.2 million of cash and available borrowing capacity under its revolving credit facility. As of Sept. 30, 2024, the total debt was $410 million compared with $396 million as of Dec. 31, 2023.

TRS’ 2024 Guidance

TriMas continues to expect an adjusted EPS of $1.70-$1.90 for 2024.

TriMas’ Price Performance

TRS shares have gained 16.8% in the past year compared with the industry’s 84.5% growth.

TRS’ Zacks Rank

TriMas carries a Zacks Rank #5 (Strong Sell) at present.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

TriMas’ Peer Performances

Kaiser Aluminum KALU reported third-quarter adjusted EPS of 51 cents, which missed the Zacks Consensus Estimate of 67 cents. The bottom-line figure increased 11% from the year-ago quarter.

Net sales of KALU rose 0.5% year over year to $748 million but missed the consensus estimate of $773 million.

Northwest Pipe Co. NWPX came out with third-quarter earnings of $1.02 per share, beating the Zacks Consensus Estimate of 85 cents per share. This compares with earnings of 58 cents per share a year ago.

Northwest Pipe posted revenues of $130 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate of $127 million. The top line increased 9.2% year over year.

ESAB Corporation ESAB came out with third-quarter earnings of $1.25 per share, beating the Zacks Consensus Estimate of $ 1.12 per share. This compares with earnings of $1.08 per share a year ago.

ESAB posted revenues of $636 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate of $629 million. The top line fell 6.6% year over year.

Zacks Investment Research

As Election Week 2024 is upon us, Wall Street is geared up for sector-specific shakeups, with JPMorgan's Bill Peterson spotlighting a decisive split in potential stock moves.

With a Democratic win likely to power up the clean energy sector and a Donald Trump victory poised to boost steel, the stakes are high for investors in metals, mining and clean tech.

A Harris Win: Green Light For Clean Tech Rally?

Should Vice-President Kamala Harris take the White House, expect a boost across clean tech stocks, especially those linked to electric vehicles (EV) and hydrogen.

Peterson points to EVgo Inc , ChargePoint Holdings Inc and lithium players like Lithium Americas Corp and Piedmont Lithium Inc as likely to benefit from sustained clean energy initiatives.

Stocks like Plug Power Inc could also rally, riding on investor confidence that government spending won't dry up for sectors heavily backed by the Inflation Reduction Act and the Department of Energy's Loan Programs Office.

Read Also: Donald Trump’s Return To White House Could Propel These ETFs To New Highs

Trump's Win: Steel's Comeback With A Dose Of Protectionism

A Trump victory could be a bullish setup for the steel sector, especially for domestic players like Nucor Corp , Steel Dynamics Inc , and Cleveland-Cliffs Inc , which would benefit from protectionist policies supporting U.S. steel pricing.

Peterson highlights that Trump's stance against the proposed acquisition of U.S. Steel by Nippon Steel Corp could keep the spotlight on domestic operators, while Trade Expansion Act Section 232 tariffs could make U.S. steel prices attractive.

Kaiser Aluminum Corp stands to gain over Constellium SE if more tariffs come into play, thanks to Kaiser’s U.S. footprint.

Rare Earths & Base Metals: Supply Security Takes The Stage

Regardless of the outcome, Western supply chain security remains a hot-button issue, favorably positioning rare earth and graphite players like MP Materials Corp and GrafTech International Ltd .

For base metals, names like Alcoa Corp and Freeport-McMoRan Inc may see an impact from intensified China tariffs, with pricing ripple effects dependent on global stimulus responses.

With the election outcome set to shape market dynamics, these sectors have distinct paths forward. For now, it's a wait-and-see game for investors in metals, mining, and clean tech.

Read Next:

• Harris Vs Trump: Crypto Industry Anticipates ‘Favorable Regulatory Environment’ For Bitcoin And Other Digital Assets After Elections

Photo: Shutterstock

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Kaiser Aluminum (KALU) came out with quarterly earnings of $0.51 per share, missing the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -23.88%. A quarter ago, it was expected that this aluminum products company would post earnings of $0.94 per share when it actually produced earnings of $0.65, delivering a surprise of -30.85%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Kaiser, which belongs to the Zacks Metal Products - Procurement and Fabrication industry, posted revenues of $747.7 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.22%. This compares to year-ago revenues of $743.6 million. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Kaiser shares have added about 0.5% since the beginning of the year versus the S&P 500's gain of 22.7%.

What's Next for Kaiser?

While Kaiser has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Kaiser: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.65 on $765.16 million in revenues for the coming quarter and $2.99 on $3.05 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Metal Products - Procurement and Fabrication is currently in the bottom 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Northwest Pipe Co. (NWPX), has yet to report results for the quarter ended September 2024. The results are expected to be released on October 30.

This steel pipe maker is expected to post quarterly earnings of $0.85 per share in its upcoming report, which represents a year-over-year change of +46.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Northwest Pipe Co.'s revenues are expected to be $126.8 million, up 6.8% from the year-ago quarter.

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