Ball Corporation reported third-quarter 2016 adjusted earnings of 96 cents per share, surpassing the Zacks Consensus Estimate of 92 cents. Earnings decreased 4% on a year-over-year basis. Earnings per share figure for the third quarter of 2016 reflects the impact of higher shares issued for the acquisitions of Rexam and Latapack-Ball.
On a reported basis, the company posted break-even results compared to earnings of 32 cents per share in the prior-year quarter.
Operational Update
Total revenue increased 34% year over year to $2,815 million in the reported quarter. Revenues lagged the Zacks Consensus Estimate of $2,845 million.
Cost of sales increased 38% year over year to $2,338 million. Gross profit surged 17% year over year to $477 million. Gross margin contracted 250 basis points (bps) to 16.9%.
Selling, general and administrative expenses climbed 26% year over year to $135 million. Adjusted operating income jumped 36% to $311 million from $228 million in the year-ago quarter. The company reported operating margin of 11%, up 10 bps year over year.
Segment Performance
The Beverage packaging’s North and Central America segment’s revenues increased 32% year over year to $1,076 million in the reported quarter. Operating earnings of $145 million increased 33% year over year.
Sales at the Beverage packaging, Europe segment were $687 million in the reported quarter, advancing 52% year over year. Operating earnings increased 18% year over year to $72 million.
The Beverage packaging, South America segment’s revenues soared 137% year over year to $318 million in the reported quarter. Operating earnings of $60 million were a substantial improvement from $14 million in the prior-year quarter.
The Food and Aerosol Packaging segment’s sales were $329 million, declining 12% year over year. Operating earnings remained flat at $31 million.
In the Aerospace and Technologies segment, sales remained flat at $204 million. Operating earnings increased 14% year over year to $24 million. The segment’s backlog was at around $1.4 billion at the end of third quarter, more than double the year-end 2015 level.
Financial Condition
Ball Corporation had cash and cash equivalents of $645 million at the end of third quarter 2016 compared with $244 million at third quarter 2015 end. As of quarter end, Ball Corporation’s long-term debt increased to $7,724 million from $2,879 million as of Sep 30, 2015.
Outlook
Ball Corporation stated that the Rexam integration is progressing smoothly. Its long-term financial goals are well on track and the company remains optimistic that it will deliver approximately $150 million of synergies in 2017 with the full amount of at least $300 million expected by the end of 2019.
BALL CORP Price, Consensus and EPS Surprise
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Ball Corporation reported third-quarter 2016 adjusted earnings of 96 cents per share, surpassing the Zacks Consensus Estimate of 92 cents. Earnings decreased 4% on a year-over-year basis. Earnings per share figure for the third quarter of 2016 reflects the impact of higher shares issued for the acquisitions of Rexam and Latapack-Ball.
On a reported basis, the company posted break-even results compared to earnings of 32 cents per share in the prior-year quarter.
Operational Update
Total revenue increased 34% year over year to $2,815 million in the reported quarter. Revenues lagged the Zacks Consensus Estimate of $2,845 million.
Cost of sales increased 38% year over year to $2,338 million. Gross profit surged 17% year over year to $477 million. Gross margin contracted 250 basis points (bps) to 16.9%.
Selling, general and administrative expenses climbed 26% year over year to $135 million. Adjusted operating income jumped 36% to $311 million from $228 million in the year-ago quarter. The company reported operating margin of 11%, up 10 bps year over year.
Segment Performance
The Beverage packaging’s North and Central America segment’s revenues increased 32% year over year to $1,076 million in the reported quarter. Operating earnings of $145 million increased 33% year over year.
Sales at the Beverage packaging, Europe segment were $687 million in the reported quarter, advancing 52% year over year. Operating earnings increased 18% year over year to $72 million.
The Beverage packaging, South America segment’s revenues soared 137% year over year to $318 million in the reported quarter. Operating earnings of $60 million were a substantial improvement from $14 million in the prior-year quarter.
The Food and Aerosol Packaging segment’s sales were $329 million, declining 12% year over year. Operating earnings remained flat at $31 million.
In the Aerospace and Technologies segment, sales remained flat at $204 million. Operating earnings increased 14% year over year to $24 million. The segment’s backlog was at around $1.4 billion at the end of third quarter, more than double the year-end 2015 level.
Financial Condition
Ball Corporation had cash and cash equivalents of $645 million at the end of third quarter 2016 compared with $244 million at third quarter 2015 end. As of quarter end, Ball Corporation’s long-term debt increased to $7,724 million from $2,879 million as of Sep 30, 2015.
Outlook
Ball Corporation stated that the Rexam integration is progressing smoothly. Its long-term financial goals are well on track and the company remains optimistic that it will deliver approximately $150 million of synergies in 2017 with the full amount of at least $300 million expected by the end of 2019.
BALL CORP 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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