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Ball Corporation reported third-quarter 2020 adjusted earnings of 89 cents per share, beating the Zacks Consensus Estimate of 77 cents. The bottom line also improved 27% on a year-over-year basis. The quarterly results reflect solid global beverage-can demand and backlog growth in the Aerospace segment.
On a reported basis, the company posted earnings of 72 cents per share compared with the prior-year quarter’s 27 cents.
Total sales were $3,093 million in the reported quarter, up 4.7% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $2,976 million. Global beverage can volumes were up 9% in the quarter.
Ball Corporation Price, Consensus and EPS Surprise
Cost of sales amounted to $2,430 million in third-quarter 2020, up 3% from the year-ago quarter. Gross profit totaled $663 million compared with the year-ago quarter’s $590 million. Gross margin came in at 21.4% during the reported quarter compared with the prior-year quarter figure of 20.0%.
Selling, general and administrative expenses increased 34% year over year to $121 million. Adjusted operating profit improved 14% year-over-year to $419 million. Adjusted operating margin came in at 13.5% compared with the prior-year quarter’s 12.5%.
Segment Performance
The Beverage packaging’s North and Central America segment revenues increased to $1,327 million during third-quarter 2020 from the year-ago quarter’s $1,230 million. Operating earnings surged 33% year over year to $209 million.
Sales at the Beverage packaging, EMEA segment were $809 million in the third quarter, up 6% year over year. Operating earnings increased 11% year over year to $117 million.
The Beverage packaging South America segment’s revenues increased to $432 million in the third quarter from $392 million in the prior-year period. Operating earnings rose to $64 million from the year-earlier quarter’s $60 million.
In the Aerospace segment, sales climbed 21% year over year to $451 million. Operating earnings increased to $44 million from the year-ago quarter figure of $35 million. As of the end of the reported quarter, the segment’s contracted backlog improved 14% year over year to $2.4 billion. Contracts already won but not yet booked into current contracted backlog was $4.9 billion.
Financial Condition
Ball Corporation reported cash and cash equivalents of $771 million at the end of the third quarter, up from the $483 million at the end of the year-earlier period. Cash used in operating activities was $345 million in the first nine-month period of 2020 compared with $656 million cash generated in the year-ago period. The company’s long-term debt increased to $7.7 billion at the end of the third quarter from $6.6 billion at the end of prior-year quarter.
Outlook
Given the significant growth prospects in North American beverage business, the company anticipates current-year capital expenditures to exceed $900 million. The company is on track to meet the previously-announced projects and will continue to deploy additional capital across existing business portfolio to support new customer wins. Backed by the ongoing demand for its sustainable aluminum packaging solutions and critical aerospace technologies, the company expects to increase earnings per share in the ongoing year.
Share Price Performance
Ball Corporation's shares have gained 26.4% over the past three months compared with the industry’s growth of 22.9%.
Zacks Rank and Stocks to Consider
Ball Corporation currently carries a Zacks Rank #3 (Hold).
Crown Holdings has a projected earnings growth rate of 11.7% for fiscal 2020. Over the past year, the company’s shares have appreciated 25% over the past three months.
iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. The company’s shares have gained 11% in the past three months.
Worthington has an expected earnings growth rate of 19.2% for 2020. Over the past three months, the stock has climbed 20%.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Ball Corp's (BLL) Q3 Earnings & Revenues Beat Estimates
Ball Corporation reported third-quarter 2020 adjusted earnings of 89 cents per share, beating the Zacks Consensus Estimate of 77 cents. The bottom line also improved 27% on a year-over-year basis. The quarterly results reflect solid global beverage-can demand and backlog growth in the Aerospace segment.
On a reported basis, the company posted earnings of 72 cents per share compared with the prior-year quarter’s 27 cents.
Total sales were $3,093 million in the reported quarter, up 4.7% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $2,976 million. Global beverage can volumes were up 9% in the quarter.
Ball Corporation Price, Consensus and EPS Surprise
Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote
Operational Update
Cost of sales amounted to $2,430 million in third-quarter 2020, up 3% from the year-ago quarter. Gross profit totaled $663 million compared with the year-ago quarter’s $590 million. Gross margin came in at 21.4% during the reported quarter compared with the prior-year quarter figure of 20.0%.
Selling, general and administrative expenses increased 34% year over year to $121 million. Adjusted operating profit improved 14% year-over-year to $419 million. Adjusted operating margin came in at 13.5% compared with the prior-year quarter’s 12.5%.
Segment Performance
The Beverage packaging’s North and Central America segment revenues increased to $1,327 million during third-quarter 2020 from the year-ago quarter’s $1,230 million. Operating earnings surged 33% year over year to $209 million.
Sales at the Beverage packaging, EMEA segment were $809 million in the third quarter, up 6% year over year. Operating earnings increased 11% year over year to $117 million.
The Beverage packaging South America segment’s revenues increased to $432 million in the third quarter from $392 million in the prior-year period. Operating earnings rose to $64 million from the year-earlier quarter’s $60 million.
In the Aerospace segment, sales climbed 21% year over year to $451 million. Operating earnings increased to $44 million from the year-ago quarter figure of $35 million. As of the end of the reported quarter, the segment’s contracted backlog improved 14% year over year to $2.4 billion. Contracts already won but not yet booked into current contracted backlog was $4.9 billion.
Financial Condition
Ball Corporation reported cash and cash equivalents of $771 million at the end of the third quarter, up from the $483 million at the end of the year-earlier period. Cash used in operating activities was $345 million in the first nine-month period of 2020 compared with $656 million cash generated in the year-ago period. The company’s long-term debt increased to $7.7 billion at the end of the third quarter from $6.6 billion at the end of prior-year quarter.
Outlook
Given the significant growth prospects in North American beverage business, the company anticipates current-year capital expenditures to exceed $900 million. The company is on track to meet the previously-announced projects and will continue to deploy additional capital across existing business portfolio to support new customer wins. Backed by the ongoing demand for its sustainable aluminum packaging solutions and critical aerospace technologies, the company expects to increase earnings per share in the ongoing year.
Share Price Performance
Ball Corporation's shares have gained 26.4% over the past three months compared with the industry’s growth of 22.9%.
Zacks Rank and Stocks to Consider
Ball Corporation currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Crown Holdings, Inc. (CCK - Free Report) , iRobot Corporation (IRBT - Free Report) and Worthington Industries, Inc. (WOR - Free Report) . All of these stocks flaunt a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crown Holdings has a projected earnings growth rate of 11.7% for fiscal 2020. Over the past year, the company’s shares have appreciated 25% over the past three months.
iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. The company’s shares have gained 11% in the past three months.
Worthington has an expected earnings growth rate of 19.2% for 2020. Over the past three months, the stock has climbed 20%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>