Shares of Ball Corporation (BLL - Free Report) have gained 1.4% since its announcement of the closure of the Danville, Ill., steel aerosol packaging manufacturing plant in North America. The plant will cease production in the second half of 2014.
The Danville plant produces three-piece welded aerosol cans and ends for household products' customers. Ball Corp. will redeploy the assets to other existing facilities for continuing supply to consumers.
The estimated after-tax charge for the closure is $7 million, the majority of which will be recorded during the fourth quarter of 2013. As per company policies and the effects of bargaining process, Ball Corp. will provide outplacement services, severance pay and other benefits to 47 employees. They will also be able to apply for other open positions in the company.
Ball Corp., which belongs to the containers and packaging industry along with Crown Holdings Inc. (CCK - Free Report) , EveryWare Global, Inc. and Greif, Inc. (GEF - Free Report) , reported third-quarter 2013 adjusted earnings of $1.00 per share, up 11% year over year. The results beat the Zacks Consensus Estimate of 93 cents.
Operating earnings for the Metal Beverage Packaging, Americas & Asia segment decreased 5% year over year to $134.8 million, affected by ceased production of 12-ounce beverage containers in the North American facility. However, the company expects the segment to benefit from the Alagoinhas plant's second production line, which is on track.
In addition, product launches, expansion into emerging markets and strong backlog in the aerospace and technologies segment will also drive growth. However, uncertainty in the global economic scenario remains a headwind.
Broomfield, Colo.-based Ball Corp. is a manufacturer of metal and plastic packaging, primarily for beverages and food. It also supplies aerospace and other technologies and services to government and commercial customers.
Ball Corp. currently holds a short-term Zacks Rank #3 (Hold).