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Ball Corp (BLL) to Report Q2 Earnings: What's in the Cards?

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Ball Corporation (BLL - Free Report) is scheduled to report second-quarter 2021 results on Aug 5, before the opening bell.

Q1 Performance

In the last reported quarter, Ball Corp’s earnings and revenues increased year over year, reflecting solid global beverage-can volume growth. The company also beat the Zacks Consensus Estimate on both counts.

The company has a trailing four-quarter average earnings surprise of 10.23%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at 83 cents, suggesting growth of 27.6% from the prior-year quarter. The Zacks Consensus Estimate for total sales stands at $3.26 billion, indicating a year-over-year improvement of 16.2%.

Price Performance

Shares of Ball Corp have gained 9.8%, in the past year, compared with the industry's rally of 16.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

Factors to Note

Ball Corp provides key aluminum packaging products and services to consumer-oriented end-markets, such as food and beverages, household and healthcare. Demand for these products has been robust on increased at-home consumption amid the pandemic. In fact, the company has been gaining from strong global beverage-can demand as consumers now prefer cans over glass and plastic. These factors are likely to have favored the second-quarter performance. The company has been focused on improving its efficiency and reducing costs. These initiatives are anticipated to have boosted the company’s margin in the to-be-reported quarter.

The Beverage packaging, North and Central America segment is projected to have generated sales of $1,393 million during the June-end quarter, calling for a 9.9% year-over-year increase. Segment operating income is estimated at $188 million compared with the prior-year quarter’s $189 million. Operational efficiency, new customer contracts and solid demand for aluminum beverage packaging are likely to have aided the segment during the quarter to be reported.

The Zacks Consensus Estimate for the Beverage packaging, South America segment’s net sales is pegged at $400 million, suggesting growth of 21.5% from the year-ago period. This reflects demand for beverage cans. The segment’s operating income is pinned at $75 million, indicating year-over-year growth of 63%.

The Zacks Consensus Estimate for the Beverage packaging, Europe segment’s sales stands at $827 million for the to-be-reported quarter, calling for an improvement of 18.3% from the prior-year quarter. The segment’s operating income is projected at $114 million, suggesting a jump of 81%, year over year. Customers’ increasing demand for cans and investment in incremental capacity in the company’s existing facilities is expected to have contributed to the segment’s performance during the quarter under review.

The Aerospace segment’s contracted backlog remained strong at $2.2 billion as of the end of first-quarter 2021. Program execution remains at a high level across the business. The segment continues to win and provide mission-critical programs and technologies to U.S. government, defense, intelligence, reconnaissance and surveillance customers. This is likely to get reflected in the segment’s second-quarter top-line results. The Zacks Consensus Estimate for the Aerospace segment's revenues is pegged at $482 million for the period in discussion, indicating a year-over-year improvement of 10%. The segment’s operating income is projected at $43.2 million, suggesting year-over-year growth of 44.2%.

The company might have incurred higher-than-expected start-up costs due to the ongoing capacity-expansion efforts to meet growing demand for cans. Further, incremental costs related to the COVID-19 pandemic are expected to have dampened near-term price/mix. Ball Corp has been importing cans to meet demand until its new plants ramp up, which might have led to higher freight costs. These factors are likely to have weighed on its margins during the quarter to be reported.

Ball Corporation Price and EPS Surprise

Ball Corporation Price and EPS Surprise

Ball Corporation price-eps-surprise | Ball Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Ball Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ball Corp has an Earnings ESP of -0.95%.

Zacks Rank: Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some Industrial Products stocks worth considering as these have the right combination of elements to post an earnings beat in their upcoming releases:

Flowserve Corporation (FLS - Free Report) has an Earnings ESP of +3.58% and carries a Zacks Rank #2, currently.

Eos Energy Enterprises, Inc. (EOSE - Free Report) , currently a Zacks #3 Ranked stock, has an Earnings ESP of +36.54%.

Parker-Hannifin Corporation (PH - Free Report) has an Earnings ESP of +1.33% and carries a Zacks Rank of 3, at present.