Crown Holdings Inc. (CCK - Free Report) reported third-quarter 2016 adjusted earnings per share of $1.33, which surpassed the Zacks Consensus Estimate of $1.30 but slipped 1% year over year. On a reported basis, earnings came in at $1.31 per share, reflecting an increase from $1.01 in the year-ago quarter.
Operational Update
Net sales in the quarter declined nearly 5% year over year to $2,326 million from $2,460 million in the year-ago quarter, primarily due to unfavorable currency translation and the pass through of lower material costs. Revenues lagged the Zacks Consensus Estimate of $2,402 million.
Cost of products sold went down 7.4% year over year to $1,838 million. Gross profit inched up 2.5% to $488 million, with gross margin expanding 170 basis points to 21% in the quarter, both on a year-over-year basis.
Selling and administrative expenses slumped 4% year over year to $90 million. Adjusted segment operating income improved 4% year over year to $335 million in the quarter. Operating margin surged 14.4% from 13% in the year-ago quarter.
Segment Performance
Net sales from the Americas Beverage segment were $719 million, down 3% from $741 million in the year-ago quarter. Segment operating profit dipped 3% to $119 million from $123 million in the year-ago quarter.
The North-America Food segment’s sales went down 2% year over year to $190 million. Operating earnings also fell 4% year over year to $25 million.
The European Beverage segment’s sales dropped 3% year over year to $413 million. However, operating income declined 2% year over year to $83 million.
Revenues in the European Food segment were down 1% year over year to $599 million. Segment operating profit went down 1% to $96 million from $97 million in the year-ago quarter.
Revenues in the Asia-Pacific segment decreased 1% year over year to $281 million. Operating profit remained flat at $37 million in the reported quarter.
Financial Update
Crown Holdings had cash and cash equivalents of $526 million at the end of third-quarter 2016 compared with $466 million at the end of the prior-year quarter. Cash flow from operations came in at $376 million for the nine-month period ending Sep 30, 2016 compared with $315 million in the comparable year-ago period. Adjusted free cash flow was $154 million in the said period compared with $139 million in the prior-year period. As of quarter end, Crown Holdings’ total debt fell to $5.27 billion from $5.75 billion as of Sep 30, 2015.
Outlook
Crown Holdings remains on schedule with its capacity expansion projects to meet surging demand for beverage cans. In June, the company successfully commenced operations at its third Cambodian beverage can plant at Phnom Penh. The new beverage can plant in Monterrey, Mexico as well as the second production line at the Osmaniye, Turkey facility are scheduled to begin production during the fourth quarter.
The company plans to open the Nichols, NY beverage can plant in early 2017 which will expand its specialty can presence in North America. In Colombia, Crown Holdings has begun capacity expansion and the added production will be ready for shipment in second-quarter 2017. The company has begun installation of a second high speed aluminum production line at its beverage can plant in Custines, France, which will complete that facility's conversion from steel to aluminum. Commercial start-up of the line is scheduled for Apr 2017.
CROWN HLDGS INC Price, Consensus and EPS Surprise
Zacks Names "Single Best Pick to Double"
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Crown Holdings Inc. (CCK - Free Report) reported third-quarter 2016 adjusted earnings per share of $1.33, which surpassed the Zacks Consensus Estimate of $1.30 but slipped 1% year over year. On a reported basis, earnings came in at $1.31 per share, reflecting an increase from $1.01 in the year-ago quarter.
Operational Update
Net sales in the quarter declined nearly 5% year over year to $2,326 million from $2,460 million in the year-ago quarter, primarily due to unfavorable currency translation and the pass through of lower material costs. Revenues lagged the Zacks Consensus Estimate of $2,402 million.
Cost of products sold went down 7.4% year over year to $1,838 million. Gross profit inched up 2.5% to $488 million, with gross margin expanding 170 basis points to 21% in the quarter, both on a year-over-year basis.
Selling and administrative expenses slumped 4% year over year to $90 million. Adjusted segment operating income improved 4% year over year to $335 million in the quarter. Operating margin surged 14.4% from 13% in the year-ago quarter.
Segment Performance
Net sales from the Americas Beverage segment were $719 million, down 3% from $741 million in the year-ago quarter. Segment operating profit dipped 3% to $119 million from $123 million in the year-ago quarter.
The North-America Food segment’s sales went down 2% year over year to $190 million. Operating earnings also fell 4% year over year to $25 million.
The European Beverage segment’s sales dropped 3% year over year to $413 million. However, operating income declined 2% year over year to $83 million.
Revenues in the European Food segment were down 1% year over year to $599 million. Segment operating profit went down 1% to $96 million from $97 million in the year-ago quarter.
Revenues in the Asia-Pacific segment decreased 1% year over year to $281 million. Operating profit remained flat at $37 million in the reported quarter.
Financial Update
Crown Holdings had cash and cash equivalents of $526 million at the end of third-quarter 2016 compared with $466 million at the end of the prior-year quarter. Cash flow from operations came in at $376 million for the nine-month period ending Sep 30, 2016 compared with $315 million in the comparable year-ago period. Adjusted free cash flow was $154 million in the said period compared with $139 million in the prior-year period. As of quarter end, Crown Holdings’ total debt fell to $5.27 billion from $5.75 billion as of Sep 30, 2015.
Outlook
Crown Holdings remains on schedule with its capacity expansion projects to meet surging demand for beverage cans. In June, the company successfully commenced operations at its third Cambodian beverage can plant at Phnom Penh. The new beverage can plant in Monterrey, Mexico as well as the second production line at the Osmaniye, Turkey facility are scheduled to begin production during the fourth quarter.
The company plans to open the Nichols, NY beverage can plant in early 2017 which will expand its specialty can presence in North America. In Colombia, Crown Holdings has begun capacity expansion and the added production will be ready for shipment in second-quarter 2017. The company has begun installation of a second high speed aluminum production line at its beverage can plant in Custines, France, which will complete that facility's conversion from steel to aluminum. Commercial start-up of the line is scheduled for Apr 2017.
CROWN HLDGS INC Price, Consensus and EPS Surprise
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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