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Ball Corp (BALL) Q2 Earnings Surpass Estimates, Sales Miss
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Ball Corporation (BALL - Free Report) has reported second-quarter 2024 adjusted earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate of 73 cents. The bottom line improved 21% year over year. The upside was driven by higher volumes in North and Central America, and EMEA, offset by a decline in South America. Lower costs in Beverage Packaging, North and Central America, and a favorable price/mix in EMEA and South America also aided earnings.
On a reported basis, the company’s EPS from continuing operations was 51 cents compared with the prior-year quarter’s 40 cents.
Total sales were $2.96 billion compared with $3.07 billion (the figure is exclusive of the company's former aerospace business) in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.07 billion. Results reflect the contractual pass-through of lower aluminum costs partially offset by higher volumes in North and Central America and EMEA. Global beverage can shipments moved up 2.8%.
Ball Corporation Price, Consensus and EPS Surprise
The cost of sales was $2.36 billion, down 6% from the year-ago quarter. The gross profit totaled $602 million, up from the year-ago quarter’s $561 million. The gross margin was 20.3%, an expansion from the prior-year quarter’s 18.3%.
Selling, general and administrative expenses decreased 11.5% year over year to $139 million. Comparable segment operating earnings were $360 million compared with the prior-year quarter’s $303 million.
Segment Performances
The Beverage Packaging North and Central America segment’s revenues decreased 4% year over year to $1.47 billion in the second quarter. Results reflect the contractual pass-through of lower aluminum costs partially offset by higher volumes. We predicted sales of $1.51 billion. Operating earnings amounted to $210 million, up 20% year over year on higher volumes and lower costs. Our estimate for the segment's operating earnings was $208 million.
Sales in the Beverage Packaging EMEA segment were $880 million, down 4.3% year over year. The reported figure missed our estimate of $931 million. The decline was due to the contractual pass-through of lower aluminum costs, offset by higher shipments. Operating earnings were $113 million, marking 15.3% year-over-year growth. The improvement was driven by higher volumes and favorable price/mix partially offset by increased year-over-year costs. We projected operating earnings of $99 million.
The Beverage Packaging South America segment’s revenues rose 4.2% year over year to $422 million as favorable price/mix helped offset the impact of lower volumes. The ongoing disruptive economic and operating conditions in Argentina led to a decline in volumes. Our projection for the segment’s sales was $409 million. Operating earnings rose 23% to $37 million. The reported figure fell short of our estimate of $59 million.
Financial Condition
The company reported cash and cash equivalents of $1.35 billion at the end of the second quarter, up from around $1 billion at the end of the prior-year quarter. Cash used in operating activities amounted to $1 billion in the first half of 2024 (including $4.7 billion pertaining to the gain on Aerospace disposal) against an inflow of $0.4 billion reported in the comparable period last year.
The company’s long-term debt decreased to $5.5 billion from $7.5 billion at the end of the second quarter of 2023.
In the first half of 2024, Ball Corp returned $790 million to shareholders through share repurchases and dividends. It expects to return more than $1.6 billion to shareholders by the end of 2024.
Outlook
The company expects to deliver more than mid-single-digit comparable EPS growth in 2024 and generate a strong free cash flow.
Price Performance
Ball Corp’s shares have gained 11.8% over the past year compared with the industry’s 8.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Ball Corp currently carries a Zacks Rank #4 (Sell).
Silgan Holdings (SLGN - Free Report) reported second-quarter adjusted EPS of 88 cents, which beat the Zacks Consensus Estimate of 87 cents. The bottom line was 6% higher than earnings of 83 cents per share in the year-ago quarter.
Silgan posted revenues of $1.38 billion, which missed the consensus estimate of $1.43 billion. This compares with year-ago revenues of $1.43 billion. The company witnessed volume growth in its segments. Silgan maintained its adjusted EPS guidance of $3.55-$3.75 for 2024. This indicates a 7% year-over-year increase at the midpoint.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted EPS of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line exceeded the company’s EPS guidance of $1.55-$1.65. It improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the consensus estimate of $3.06 billion. The downside was caused by lower volumes across most businesses and unfavorable foreign currency translation. Higher beverage can shipments in the Americas Beverage segment offset some of the impacts. CCK projects adjusted EPS to be in the range of $6.00-$6.25 in 2024, up from the prior stated $5.80-$6.20.
O-I Glass, Inc. (OI - Free Report) reported second-quarter adjusted EPS of 44 cents, which beat the Zacks Consensus Estimate of 42 cents. On a year-over-year basis, earnings fell 50%, reflecting lower demand.
Revenues were $1.73 billion, down 8.5% from the year-ago quarter mainly due to lower average selling prices, unfavorable foreign currency translation and decreased sales volume. The top line missed the consensus estimate of $1.75 billion. Sales volume (in tons) declined 4.5%. Citing weak demand and planned temporary production curtailment to reduce inventory levels, OI lowered its projection for 2024. It expects adjusted earnings to be in the range of $1.00-$1.25 per share, down from the previously stated $1.50-$2.00.
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Ball Corp (BALL) Q2 Earnings Surpass Estimates, Sales Miss
Ball Corporation (BALL - Free Report) has reported second-quarter 2024 adjusted earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate of 73 cents. The bottom line improved 21% year over year. The upside was driven by higher volumes in North and Central America, and EMEA, offset by a decline in South America. Lower costs in Beverage Packaging, North and Central America, and a favorable price/mix in EMEA and South America also aided earnings.
On a reported basis, the company’s EPS from continuing operations was 51 cents compared with the prior-year quarter’s 40 cents.
Total sales were $2.96 billion compared with $3.07 billion (the figure is exclusive of the company's former aerospace business) in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.07 billion. Results reflect the contractual pass-through of lower aluminum costs partially offset by higher volumes in North and Central America and EMEA. Global beverage can shipments moved up 2.8%.
Ball Corporation Price, Consensus and EPS Surprise
Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote
Operational Update
The cost of sales was $2.36 billion, down 6% from the year-ago quarter. The gross profit totaled $602 million, up from the year-ago quarter’s $561 million. The gross margin was 20.3%, an expansion from the prior-year quarter’s 18.3%.
Selling, general and administrative expenses decreased 11.5% year over year to $139 million. Comparable segment operating earnings were $360 million compared with the prior-year quarter’s $303 million.
Segment Performances
The Beverage Packaging North and Central America segment’s revenues decreased 4% year over year to $1.47 billion in the second quarter. Results reflect the contractual pass-through of lower aluminum costs partially offset by higher volumes. We predicted sales of $1.51 billion. Operating earnings amounted to $210 million, up 20% year over year on higher volumes and lower costs. Our estimate for the segment's operating earnings was $208 million.
Sales in the Beverage Packaging EMEA segment were $880 million, down 4.3% year over year. The reported figure missed our estimate of $931 million. The decline was due to the contractual pass-through of lower aluminum costs, offset by higher shipments. Operating earnings were $113 million, marking 15.3% year-over-year growth. The improvement was driven by higher volumes and favorable price/mix partially offset by increased year-over-year costs. We projected operating earnings of $99 million.
The Beverage Packaging South America segment’s revenues rose 4.2% year over year to $422 million as favorable price/mix helped offset the impact of lower volumes. The ongoing disruptive economic and operating conditions in Argentina led to a decline in volumes. Our projection for the segment’s sales was $409 million. Operating earnings rose 23% to $37 million. The reported figure fell short of our estimate of $59 million.
Financial Condition
The company reported cash and cash equivalents of $1.35 billion at the end of the second quarter, up from around $1 billion at the end of the prior-year quarter. Cash used in operating activities amounted to $1 billion in the first half of 2024 (including $4.7 billion pertaining to the gain on Aerospace disposal) against an inflow of $0.4 billion reported in the comparable period last year.
The company’s long-term debt decreased to $5.5 billion from $7.5 billion at the end of the second quarter of 2023.
In the first half of 2024, Ball Corp returned $790 million to shareholders through share repurchases and dividends. It expects to return more than $1.6 billion to shareholders by the end of 2024.
Outlook
The company expects to deliver more than mid-single-digit comparable EPS growth in 2024 and generate a strong free cash flow.
Price Performance
Ball Corp’s shares have gained 11.8% over the past year compared with the industry’s 8.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Ball Corp currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of Peers in Q2
Silgan Holdings (SLGN - Free Report) reported second-quarter adjusted EPS of 88 cents, which beat the Zacks Consensus Estimate of 87 cents. The bottom line was 6% higher than earnings of 83 cents per share in the year-ago quarter.
Silgan posted revenues of $1.38 billion, which missed the consensus estimate of $1.43 billion. This compares with year-ago revenues of $1.43 billion. The company witnessed volume growth in its segments. Silgan maintained its adjusted EPS guidance of $3.55-$3.75 for 2024. This indicates a 7% year-over-year increase at the midpoint.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted EPS of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line exceeded the company’s EPS guidance of $1.55-$1.65. It improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the consensus estimate of $3.06 billion. The downside was caused by lower volumes across most businesses and unfavorable foreign currency translation. Higher beverage can shipments in the Americas Beverage segment offset some of the impacts. CCK projects adjusted EPS to be in the range of $6.00-$6.25 in 2024, up from the prior stated $5.80-$6.20.
O-I Glass, Inc. (OI - Free Report) reported second-quarter adjusted EPS of 44 cents, which beat the Zacks Consensus Estimate of 42 cents. On a year-over-year basis, earnings fell 50%, reflecting lower demand.
Revenues were $1.73 billion, down 8.5% from the year-ago quarter mainly due to lower average selling prices, unfavorable foreign currency translation and decreased sales volume. The top line missed the consensus estimate of $1.75 billion. Sales volume (in tons) declined 4.5%. Citing weak demand and planned temporary production curtailment to reduce inventory levels, OI lowered its projection for 2024. It expects adjusted earnings to be in the range of $1.00-$1.25 per share, down from the previously stated $1.50-$2.00.