It has been about a month since the last earnings report for Ball Corporation . Shares have added about 2.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ball Corp Tops Q1 Earnings & Sales, Reaffirms View
Ball Corp reported first-quarter 2017 adjusted earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.69. Earnings climbed around 29% year over year.
On a reported basis, the company posted earnings of $0.38 per share compared to a loss of $0.90 per share recorded in the prior-year quarter.
Operational Update
Total revenue jumped 40.8% year over year to $2.473 billion in the reported quarter. Revenues marginally surpassed the Zacks Consensus Estimate of $2.445 billion.
Cost of sales increased 39.5% year over year to $2.0 billion. Gross profit surged 46.5% year over year to $498 million. Gross margin contracted 60 basis points (bps) to 20%.
Selling, general and administrative expenses climbed 32% year over year to $143 million. Adjusted operating income increased 31.8% to $207 million from $157 million in the year-ago quarter. The company reported operating margin of 8.4%, down 50 bps year over year.
Segment Performance
The Beverage packaging’s North and Central America segment’s revenues increased 29% year over year to $949 million in the reported quarter. Operating earnings of $123 million increased 32% year over year.
Sales at the Beverage packaging, Europe segment came in at $508 million in the reported quarter, advancing 42.7% year over year. Operating earnings increased 20.5% year over year to $47 million.
The Beverage packaging, South America segment’s revenues soared 194% year over year to $371 million in the reported quarter. Operating earnings of $58 million recorded a substantial improvement from $18 million in the prior-year quarter.
The Food and Aerosol Packaging segment’s sales came in at $272 million, declining 4.2% year over year. Operating earnings increased 5% year over year to $21 million.
In the Aerospace and Technologies segment, sales went up 31% year over year to $236 million. Operating earnings increased 16.7% year over year to $21 million. The segment’s backlog came in at around $1.4 billion at the end of the first quarter.
Financial Condition
Ball Corporation had cash and cash equivalents of $458 million at the end of first-quarter 2017 compared with $205 million at the end of first-quarter 2016. The company recorded cash used for operating activities of $398 million in the reported quarter compared with cash usage of $386 million recorded in the year-ago quarter. As of Mar 31, 2017, Ball Corporation’s long-term debt increased to $7,476 million from $5,408 million as of Mar 31, 2016.
On Apr 26, Ball Corporation announced a two-for-one split of its shares, effective May 16 to shareholders of record on May 8. The company also declared a 54% hike in the quarterly cash dividend, payable Jun 15, 2017, to shareholders of record as of Jun 1. Ball Corporation's existing share repurchase authorization exceeds 20 million of the company's post-split shares.
Outlook
Ball Corporation reaffirmed its long-term financial goals. The company expects 2017 free cash flow to be in the range of $750–$850 million and capital spending of approximately $500 million. It also remains on track to deliver on its free cash flow, EVA dollar growth, diluted earnings per share growth and cost savings targets for 2017 and beyond. Further, the company remains optimistic to deliver at least $150 million of synergies in the second half of 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
Ball Corporation Price and Consensus
VGM Scores
At this time, Ball Corp's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. The stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum investors based on our style scores.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
Image: Bigstock
Why Is Ball Corp (BLL) Up 2.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for Ball Corporation . Shares have added about 2.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ball Corp Tops Q1 Earnings & Sales, Reaffirms View
Ball Corp reported first-quarter 2017 adjusted earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.69. Earnings climbed around 29% year over year.
On a reported basis, the company posted earnings of $0.38 per share compared to a loss of $0.90 per share recorded in the prior-year quarter.
Operational Update
Total revenue jumped 40.8% year over year to $2.473 billion in the reported quarter. Revenues marginally surpassed the Zacks Consensus Estimate of $2.445 billion.
Cost of sales increased 39.5% year over year to $2.0 billion. Gross profit surged 46.5% year over year to $498 million. Gross margin contracted 60 basis points (bps) to 20%.
Selling, general and administrative expenses climbed 32% year over year to $143 million. Adjusted operating income increased 31.8% to $207 million from $157 million in the year-ago quarter. The company reported operating margin of 8.4%, down 50 bps year over year.
Segment Performance
The Beverage packaging’s North and Central America segment’s revenues increased 29% year over year to $949 million in the reported quarter. Operating earnings of $123 million increased 32% year over year.
Sales at the Beverage packaging, Europe segment came in at $508 million in the reported quarter, advancing 42.7% year over year. Operating earnings increased 20.5% year over year to $47 million.
The Beverage packaging, South America segment’s revenues soared 194% year over year to $371 million in the reported quarter. Operating earnings of $58 million recorded a substantial improvement from $18 million in the prior-year quarter.
The Food and Aerosol Packaging segment’s sales came in at $272 million, declining 4.2% year over year. Operating earnings increased 5% year over year to $21 million.
In the Aerospace and Technologies segment, sales went up 31% year over year to $236 million. Operating earnings increased 16.7% year over year to $21 million. The segment’s backlog came in at around $1.4 billion at the end of the first quarter.
Financial Condition
Ball Corporation had cash and cash equivalents of $458 million at the end of first-quarter 2017 compared with $205 million at the end of first-quarter 2016. The company recorded cash used for operating activities of $398 million in the reported quarter compared with cash usage of $386 million recorded in the year-ago quarter. As of Mar 31, 2017, Ball Corporation’s long-term debt increased to $7,476 million from $5,408 million as of Mar 31, 2016.
On Apr 26, Ball Corporation announced a two-for-one split of its shares, effective May 16 to shareholders of record on May 8. The company also declared a 54% hike in the quarterly cash dividend, payable Jun 15, 2017, to shareholders of record as of Jun 1. Ball Corporation's existing share repurchase authorization exceeds 20 million of the company's post-split shares.
Outlook
Ball Corporation reaffirmed its long-term financial goals. The company expects 2017 free cash flow to be in the range of $750–$850 million and capital spending of approximately $500 million. It also remains on track to deliver on its free cash flow, EVA dollar growth, diluted earnings per share growth and cost savings targets for 2017 and beyond. Further, the company remains optimistic to deliver at least $150 million of synergies in the second half of 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
Ball Corporation Price and Consensus
Ball Corporation Price and Consensus | Ball Corporation Quote
VGM Scores
At this time, Ball Corp's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. The stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum investors based on our style scores.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.