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Ball Corp (BLL) Q2 Earnings Beat, Up Y/Y on Solid Can Demand
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Ball Corporation reported second-quarter 2021 adjusted earnings of 86 cents per share, beating the Zacks Consensus Estimate of 83 cents. The bottom line improved 32% on a year-over-year basis. The quarterly results reflect 13% aluminum beverage volume growth and 20% aluminum aerosol growth.
On a reported basis, the company delivered earnings of 61 cents per share compared with the prior-year quarter’s 28 cents.
Total sales were $3,459 million in the reported quarter, up 23% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $3,256 million. Global beverage-can volumes were up 13% in the quarter.
Ball Corporation Price, Consensus and EPS Surprise
Cost of sales amounted to $2,760 million in second-quarter 2021, up 24% from the year-ago quarter. Gross profit totaled $699 million compared with the year-ago quarter’s $571 million. Gross margin came in at 20.2% during the reported quarter, reflecting a 20 basis point contraction year over year.
Selling, general and administrative expenses surged 49% year over year to $166 million. Adjusted operating profit improved 22% year over year to $399 million. Adjusted operating margin came in at 11.5%, compared with 11.7% in the prior-year quarter.
Segment Performance
The Beverage packaging North and Central America segment revenues increased to $1,524 million in second-quarter 2021 from the year-ago quarter’s $1,267 million. Operating earnings amounted to $193 million during the reported quarter, up 2% year over year.
Sales at the Beverage packaging, EMEA segment were $906 million in the second quarter, up 30% year over year. Operating earnings soared 97% year over year to $124 million.
The Beverage packaging South America segment’s revenues increased to $452 million in the reported quarter from the prior-year period’s $329 million. Operating earnings climbed 70% to $78 million from the year-earlier quarter’s $46 million.
In the Aerospace segment, sales were up 5% year over year to $459 million. Operating earnings increased to $34 million from the year-ago quarter figure of $30 million. At the end of the quarter under review, the segment’s contracted backlog was $3 billion. Contracts already won but not yet booked into current contracted backlog was $5.1 billion.
Financial Condition
The company reported cash and cash equivalents of $571 million at the end of second-quarter 2021, down from $801 million at the end of the 2020. Cash flow generated from operating activities was $477 million in the first six month period of 2021 compared with usage of $232 million in the prior-year comparable period. The company’s long-term debt declined to $6.97 billion at the end of the second quarter of 2021 from $7.5 billion at the end of 2020.
The company is increasing its dividend by 33% and also initiating a share repurchase program of at least $500 million. It is investing in excess of $1.5 billion in capital expenditures to drive growth.
Outlook
Global demand for aluminum packaging continues to grow as customers now prefer cans over glass and plastic. The company maintains its long-term diluted earnings per share growth goal of at least 10-15%.
Share Price Performance
Image Source: Zacks Investment Research
Ball Corp's shares have gained 5.3% over the past year compared with the industry’s rally of 14.4%.
Image: Bigstock
Ball Corp (BLL) Q2 Earnings Beat, Up Y/Y on Solid Can Demand
Ball Corporation reported second-quarter 2021 adjusted earnings of 86 cents per share, beating the Zacks Consensus Estimate of 83 cents. The bottom line improved 32% on a year-over-year basis. The quarterly results reflect 13% aluminum beverage volume growth and 20% aluminum aerosol growth.
On a reported basis, the company delivered earnings of 61 cents per share compared with the prior-year quarter’s 28 cents.
Total sales were $3,459 million in the reported quarter, up 23% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $3,256 million. Global beverage-can volumes were up 13% 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 $2,760 million in second-quarter 2021, up 24% from the year-ago quarter. Gross profit totaled $699 million compared with the year-ago quarter’s $571 million. Gross margin came in at 20.2% during the reported quarter, reflecting a 20 basis point contraction year over year.
Selling, general and administrative expenses surged 49% year over year to $166 million. Adjusted operating profit improved 22% year over year to $399 million. Adjusted operating margin came in at 11.5%, compared with 11.7% in the prior-year quarter.
Segment Performance
The Beverage packaging North and Central America segment revenues increased to $1,524 million in second-quarter 2021 from the year-ago quarter’s $1,267 million. Operating earnings amounted to $193 million during the reported quarter, up 2% year over year.
Sales at the Beverage packaging, EMEA segment were $906 million in the second quarter, up 30% year over year. Operating earnings soared 97% year over year to $124 million.
The Beverage packaging South America segment’s revenues increased to $452 million in the reported quarter from the prior-year period’s $329 million. Operating earnings climbed 70% to $78 million from the year-earlier quarter’s $46 million.
In the Aerospace segment, sales were up 5% year over year to $459 million. Operating earnings increased to $34 million from the year-ago quarter figure of $30 million. At the end of the quarter under review, the segment’s contracted backlog was $3 billion. Contracts already won but not yet booked into current contracted backlog was $5.1 billion.
Financial Condition
The company reported cash and cash equivalents of $571 million at the end of second-quarter 2021, down from $801 million at the end of the 2020. Cash flow generated from operating activities was $477 million in the first six month period of 2021 compared with usage of $232 million in the prior-year comparable period. The company’s long-term debt declined to $6.97 billion at the end of the second quarter of 2021 from $7.5 billion at the end of 2020.
The company is increasing its dividend by 33% and also initiating a share repurchase program of at least $500 million. It is investing in excess of $1.5 billion in capital expenditures to drive growth.
Outlook
Global demand for aluminum packaging continues to grow as customers now prefer cans over glass and plastic. The company maintains its long-term diluted earnings per share growth goal of at least 10-15%.
Share Price Performance
Image Source: Zacks Investment Research
Ball Corp's shares have gained 5.3% over the past year compared with the industry’s rally of 14.4%.
Zacks Rank and Stocks to Consider
Ball Corp currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Mueller Industries, Inc. (MLI - Free Report) , Greif, Inc. (GEF - Free Report) and Encore Wire Corporation (WIRE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Mueller Industries has an estimated earnings growth rate of 154% for the ongoing year. The company’s shares have rallied 44% in the past year.
Greif has an expected earnings growth rate of 47% for 2021. Over the past year, the stock has climbed 63%.
Encore Wire has an estimated earnings growth rate of 333% for the ongoing year. The company’s shares have appreciated 56% in the past year.