Ball Corporation BALL reported third-quarter 2024 adjusted earnings per share (EPS) of 91 cents, which beat the Zacks Consensus Estimate of 87 cents. The bottom line improved 10% year over year. BALL reported higher volumes in EMEA that offset lower volumes in North and Central America and South America. Despite low volumes, each of its three segments reported year-over-year improvement in profits.
On a reported basis, Ball’s EPS from continuing operations was 63 cents compared with the prior-year quarter’s 42 cents.
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Ball Corp.’s Sales Dip Y/Y
Total sales were $3.08 billion, a 1% dip from $3.11 billion (the figure is exclusive of the company's divested aerospace business) in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.17 billion.
Ball Corporation Price, Consensus and EPS Surprise
The cost of sales was $2.43 billion, down 3.5% from the year-ago quarter. The gross profit totaled $657 million, up from the year-ago quarter’s $599 million. The gross margin was 21.3%, a 200-basis point expansion from the prior-year quarter’s 19.3%.
Selling, general and administrative expenses rose 7% year over year to $142 million. Comparable segment operating earnings were $409 million, 13.6% higher than the prior-year quarter’s $360 million. Segment operating margin was 13.3% compared with 11.6% in the year-ago quarter.
Ball Corp.’s Segment Performances in Q3
The Beverage Packaging North and Central America segment’s revenues decreased 5.5% year over year to $1.46 billion due to lower volumes and price/mix. We predicted sales of $1.53 billion.
Operating earnings amounted to $203 million, up 3.6% year over year as impact of price/mix was partially offset by lower volumes of 3.1%. Our estimate for the segment's operating earnings was $224.6 million.
Sales in the Beverage Packaging EMEA segment were $950 million, up 5.3% year over year aided by higher volumes. The reported figure surpassed our estimate of $926 million
Operating earnings were $128 million, marking 24.3% year-over-year growth. The improvement was driven by higher volumes. We projected operating earnings of $117 million.
The Beverage Packaging South America segment’s revenues dipped 1% year over year to $484 million as favorable price/mix was offset by lower volumes. The impact of disruptive economic and operating conditions in Argentina led to a decline in volumes. Our projection for the segment’s sales was $514 million. Operating earnings rose 28% to $78 million. The reported figure beat our estimate of $63 million.
BALL’s Cash Flow & Debt Position
The company reported cash and cash equivalents of $1.44 billion at the end of the third quarter, up from $1.34 billion at the end of the prior-year quarter. Cash used in operating activities amounted to $385 billion in the first nine-month period of 2024 (including $4.7 billion pertaining to the gain on Aerospace disposal) against an inflow of $1.13 billion in the comparable period last year.
The company’s long-term debt decreased to $5.35 billion from $7.48 billion at the end of the third quarter of 2023.
In the first nine-month period of 2024, Ball Corp. returned $1.25 billion to shareholders through share repurchases and dividends. It expects to return more than $1.6 billion to shareholders by the end of 2024.
The company recently completed the acquisition of Alucan Entec, S.A., a European impact extruded aluminum packaging business.
Ball Corp.’s Outlook for 2024
The company expects to either meet or exceed its stated goal of more than mid-single-digit comparable EPS growth in 2024 and generate a strong free cash flow. BALL targets to deliver comparable diluted EPS growth of greater than 10% per year in 2025 and thereafter.
BALL Stock’s Price Performance
Ball Corp.’s shares have gained 33.4% over the past year compared with the industry’s 26.5% growth.
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Performances of Ball Corp.’s Peers in Q3
Silgan Holdings SLGN reported third-quarter adjusted EPS of $1.21, which missed the Zacks Consensus Estimate of $1.23. The bottom line was 4% higher than $1.16 per share in the year-ago quarter.
Silgan posted revenues of $1.75 billion, which missed the consensus estimate of $1.84 billion. The figure was 3% lower than year-ago revenues of $1.8 billion. Sales declined due to the contractual pass through of lower raw material costs, mostly in the Metal Containers segment.
Silgan narrowed its estimate of adjusted EPS for 2024 from $3.55-$3.75 to the range of $3.55-$3.65. The midpoint of the range indicates 6% increase from 2023.
Crown Holdings, Inc. CCK reported third-quarter adjusted EPS of $1.99, which beat the Zacks Consensus Estimate of $1.81. The bottom line exceeded the company’s EPS guidance of $1.75-$1.85 and improved 15% year over year.
Net sales totaled $3.07 billion, up 0.2% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $3.06 billion. The upside was driven by higher global beverage can volumes and food can volumes in North America. This was partially offset by unfavorable foreign currency translation and lower volumes in Transit Packaging and the beverage can equipment business. CCK projects adjusted EPS to be between $6.25 and $6.35.
BALL’s Zacks Rank & A Stock to Consider
Ball Corp. currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the Industrial Products sector is Packaging Corporation of America PKG, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Packaging Corporation has an average trailing four-quarter earnings surprise of 8.6%. The Zacks Consensus Estimate for PKG’s fiscal 2024 earnings is pinned at $9.00 per share, which indicates year-over-year growth of 3.5%. Estimates have moved 3% north in the past 30 days. The company’s shares have risen 42.8% in the past year.
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