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Ball Corporation (BLL) Q3 Earnings: A Surprise in Store?
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Beverage can maker Ball Corporation is scheduled to report third-quarter 2016 results before the opening bell on Nov 3. In the last-reported quarter, the company registered a year-over-year improvement in earnings despite a decline in revenues. Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Our proven model shows that Ball Corporation is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP for the company stands at +5.44% as the Most Accurate estimate is pegged at 97 cents while the Zacks Consensus Estimate stands lower at 92 cents. Positive ESP is a meaningful and leading indicator of a likely earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Ball Corporation carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should not be considered going into an earnings announcement.
The combination of Ball Corporation’ Zacks Rank #2 and a positive ESP makes us reasonably confident of an earnings beat in the upcoming report.
Surprise History
Ball Corporation outpaced the Zacks Consensus Estimate in three out of the trailing four quarters. The average positive surprise was 3.51%. In the last-reported quarter, the company posted a positive earnings surprise of 6.06%.
What is Driving the Better-Than-Expected Earnings?
In the second quarter, Ball Corporation began producing cans on the second line in its new Monterrey, Mexico, beverage facility, serving the customers under long-term contracts. Further, the company began production in its new Myanmar facility.
Its Aerospace and technologies business will benefit from a diverse portfolio of new contracts which will leverage its existing technologies and value-added approach to deliver solutions to customers. The segment’s contracted backlog at the quarter end was over $1 billion, with approximately 70%, under a cost-plus approach and 30% more of a fixed-price nature, which provides a good balance going forward. Ball Corporation is ramping up and staffing up for all of the new contracts, this is likely to benefit second-half 2016 as well as the performance in upcoming years.
Ball Corporation will gain from Rexam acquisition which will help to simplify and streamline its business. Recently, Ball Corporation entered into an agreement to sell its specialty tin manufacturing facility in Baltimore, MD, to U.S.-based Independent Can Company for around $25 million. This divestiture will help it to focus on maximizing value and generating positive EVA dollars in its core businesses.
Stocks That Warrant a Look
Ball Corporation is not the only stock looking up this quarter. Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
NN Inc. has an Earnings ESP of +4.35% and a Zacks Rank #1.
Barnes Group Inc. (B - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank #2.
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Ball Corporation (BLL) Q3 Earnings: A Surprise in Store?
Beverage can maker Ball Corporation is scheduled to report third-quarter 2016 results before the opening bell on Nov 3. In the last-reported quarter, the company registered a year-over-year improvement in earnings despite a decline in revenues. Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Our proven model shows that Ball Corporation is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP for the company stands at +5.44% as the Most Accurate estimate is pegged at 97 cents while the Zacks Consensus Estimate stands lower at 92 cents. Positive ESP is a meaningful and leading indicator of a likely earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Ball Corporation carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should not be considered going into an earnings announcement.
The combination of Ball Corporation’ Zacks Rank #2 and a positive ESP makes us reasonably confident of an earnings beat in the upcoming report.
Surprise History
Ball Corporation outpaced the Zacks Consensus Estimate in three out of the trailing four quarters. The average positive surprise was 3.51%. In the last-reported quarter, the company posted a positive earnings surprise of 6.06%.
BALL CORP Price and EPS Surprise
BALL CORP Price and EPS Surprise | BALL CORP Quote
What is Driving the Better-Than-Expected Earnings?
In the second quarter, Ball Corporation began producing cans on the second line in its new Monterrey, Mexico, beverage facility, serving the customers under long-term contracts. Further, the company began production in its new Myanmar facility.
Its Aerospace and technologies business will benefit from a diverse portfolio of new contracts which will leverage its existing technologies and value-added approach to deliver solutions to customers. The segment’s contracted backlog at the quarter end was over $1 billion, with approximately 70%, under a cost-plus approach and 30% more of a fixed-price nature, which provides a good balance going forward. Ball Corporation is ramping up and staffing up for all of the new contracts, this is likely to benefit second-half 2016 as well as the performance in upcoming years.
Ball Corporation will gain from Rexam acquisition which will help to simplify and streamline its business. Recently, Ball Corporation entered into an agreement to sell its specialty tin manufacturing facility in Baltimore, MD, to U.S.-based Independent Can Company for around $25 million. This divestiture will help it to focus on maximizing value and generating positive EVA dollars in its core businesses.
Stocks That Warrant a Look
Ball Corporation is not the only stock looking up this quarter. Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
NN Inc. has an Earnings ESP of +4.35% and a Zacks Rank #1.
Casella Waste Systems Inc. (CWST - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Barnes Group Inc. (B - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>