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Crown Holdings (CCK) Q3 Earnings & Sales Top Estimates, Up Y/Y

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Crown Holdings, Inc. (CCK - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.96, surpassing the Zacks Consensus Estimate of $1.60. The bottom-line figure increased 25.6% year over year.

Including one-time items, earnings per share improved 17% year over year to $1.59 in the reported quarter.

Net sales in the quarter came in at $3,167 million, up from the year-ago quarter’s $3,084 million. The top line increased on solid beverage-can and food-can volumes, partly offset by the pass through of lower material costs. The reported figure also beat the Zacks Consensus Estimate of $3,060 million.

Cost and Margins

Cost of products sold was up 0.9% year over year to $2,478 million. On a year-over-year basis, gross profit climbed 9.5% to $689 million. Gross margin expanded to 21.8% from the year-ago quarter’s 20.4%.

Selling and administrative expenses declined 2.6% year over year to $152 million. Segment operating income increased 16.7% year over year to $461 million during the September-end quarter. Operating margin came in at 14.6% compared with the 12.8% recorded in the prior-year quarter.

Crown Holdings, Inc. Price, Consensus and EPS Surprise

Crown Holdings, Inc. Price, Consensus and EPS Surprise

Crown Holdings, Inc. price-consensus-eps-surprise-chart | Crown Holdings, Inc. Quote

Segment Performance

Net sales in the Americas Beverage segment came in at $960 million, up 15% year over year. Segment operating profit jumped 44% year over year to $193 million.

The European Beverage segment’s sales inched up 0.5% year over year to $418 million. Operating income came in at $76 million, up 18.7% year on year.

Revenues in the European Food segment climbed 7.2% year over year to $623 million. Segment operating profit increased 14% year over year to $90 million.

The Asia-Pacific segment’s revenues declined 12% year over year to $281 million. Operating profit fell 12.7% year over year to $41 million.

Revenues in the Transit Packaging segment totaled $511 million compared with the year-ago quarter’s $564 million. Operating profit was down 2.7% year over year to $72 million.

Financial Update

Crown Holdings had cash and cash equivalents of $613 million at the end of the reported quarter compared with the year-earlier quarter’s $339 million. The company generated $309 million cash in operating activities during the first nine months of 2020 compared with the $201 million witnessed in the comparable period in 2019.

As of the July-September quarter’s end, Crown Holdings’ long-term debt decreased to $8,039 million from $8,042 million as of end of the prior-year quarter.

The company plans to initiate a quarterly dividend of at least 20 cents per share. It will make the first payment in the first quarter of 2021.

Outlook

Crown Holdings now expects fourth-quarter adjusted earnings per share (EPS) between $1.22 and $1.27. For the current year, the company now expects adjusted EPS in the range of $5.65 to $5.70. Management projects adjusted free cash flow of approximately $550 million and capital expenditures of $600 million for 2020.

The company’s products are significant part of the food and beverage supply chains, and also provide critical support to the transportation industry. It is focused on ensuring that its manufacturing facilities across the globe remain operational while continuing to meet the evolving customer demand by delivering high quality products.

Crown Holdings continues to implement several numbers of beverage-can capacity-expansion projects in a bid to meet the surging beverage-can demand. Also, it is committed to implement the previously-announced capacity-expansion projects with its strong liquidity position and sound capital structure.

Price Performance

Crown Holdings’ shares have gained 18.3% over the past year compared with the industry’s growth of 24.8%.

Zacks Rank and Other Stocks to Consider

Crown Holdings currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Industrial Products sector include Sealed Air Corporation (SEE - Free Report) , Lawson Products, Inc. (LAWS - Free Report) and Fortune Brands Home & Security, Inc. (FBHS - Free Report) , each carrying a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sealed Air has a projected earnings growth rate of 3.9% for the current year. Shares of the company have gained 2.1% over the past year.

Lawson Products has an estimated earnings growth rate of 3.4% for 2020. The company’s shares have gained 13.9% in a year’s time.

Fortune Brands has an expected earnings growth rate of 6.9% for the ongoing year. The stock has appreciated 55.6% in the past year.

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