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Why Is Ball (BLL) Down 7.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for Ball (BLL - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ball due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Ball Corp Q4 Earnings & Sales Top Estimates, Up Y/Y

Ball Corporation reported fourth-quarter 2020 adjusted earnings of 81 cents per share, beating the Zacks Consensus Estimate of 78 cents. The bottom line also improved 14% on a year-over-year basis. The quarterly results reflect solid global beverage-can volume growth and aerospace backlog.

On a reported basis, the company posted earnings of 68 cents per share compared with the prior-year quarter’s 48 cents.

Total sales were $3,102 million in the reported quarter, up 14% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $2,955 million. Global beverage-can volumes were up 12% in the quarter.

Operational Update

Cost of sales amounted to $2,448 million in fourth-quarter 2020, up 13.4% from the year-ago quarter. Gross profit totaled $654 million compared with the year-ago quarter’s $560 million. Gross margin came in at 21% during the reported quarter, flat year over year.

Selling, general and administrative expenses soared 82% year over year to $162 million. Adjusted operating profit improved 6.5% year over year to $362 million. Adjusted operating margin came in at 11.7% compared with the prior-year quarter’s 12.5%.

Segment Performance

The Beverage packaging North and Central America segment revenues increased to $1,301 million during fourth-quarter 2020 from the year-ago quarter’s $1,111 million. Operating earnings came in at $139 million during the reported quarter, flat year over year.

Sales at the Beverage packaging, EMEA segment were $768 million in the fourth quarter, up 19.6% year over year. Operating earnings increased 43.2% year over year to $106 million.

The Beverage packaging South America segment’s revenues increased to $529 million in the fourth quarter from the prior-year period’s $460 million. Operating earnings rose to $107 million from the year-earlier quarter’s $95 million.

In the Aerospace segment, sales were up 5.5% year over year to $420 million. Operating earnings increased to $39 million from the year-ago quarter figure of $37 million. At the end of 2020, the segment’s contracted backlog was $2.4 billion. Contracts already won but not yet booked into current contracted backlog was $5.5 billion.

Financial Condition

Ball Corporation reported cash and cash equivalents of $1,366 million at the end of 2020, down from the $1,798 million witnessed at the end of the 2019. Cash flow from operating activities was $1,432 million in 2020 compared with $1,548 million in 2019. The company’s long-term debt increased to $7.8 billion at the end of 2020 from $6.3 billion at the end of 2019.

2020 Results

Ball Corporation reported adjusted earnings per share of $2.97 in 2020, up 17.4% from the prior-year reported figure of $2.53. Earnings beat the Zacks Consensus Estimate of $2.93. Including one-time items, the bottom line came in at $1.76, up 6% from the $1.66 reported in 2019.

Sales rose 2.7% year over year to $11.8 billion from the prior-year figure of $11.5 billion. The top line surpassed the Zacks Consensus Estimate of $11.6 billion.


Given the significant rise in contracted volumes and backlog, the company anticipates current-year capital expenditures to exceed $1.5 billion. Ball Corporation continues to expect long-term diluted earnings per share growth goal of at least 10-15%.


How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Ball has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Ball has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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