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Ball Corp (BLL) Q3 Earnings & Sales Miss Estimates, Up Y/Y

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Ball Corporation reported third-quarter 2021 adjusted earnings of 94 cents per share, missing the Zacks Consensus Estimate of 98 cents. The bottom line improved 5.6% on a year-over-year basis. Third-quarter volume growth in North America and EMEA was offset by lower South America demand due to unfavorable weather and difficult year-over-year comparisons. During the quarter, the company's global aluminum aerosol volumes increased 15%, year over year.

On a reported basis, the company delivered earnings of 54 cents per share compared with the prior-year quarter’s 72 cents.

Total sales came in at $3,553 million in the reported quarter, up 15% from the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $3,605 million. So far this year, global beverage-can volumes were up 7%.

Operational Update

Cost of sales amounted to $2,851 million in third-quarter 2021, up 17.3% from the year-ago quarter. The gross profit totaled $702 million compared with the year-ago quarter’s $663 million. The gross margin came in at 19.7% during the reported quarter compared with the prior year quarter’s 21.4%.

Selling, general and administrative expenses flared up 22.3%, year over year, to $148 million. The adjusted operating profit was $417 million compared with the prior-year quarter’s $419 million. The adjusted operating margin came in at 11.7% compared with the prior-year quarter’s 13.5%.

 

Ball Corporation Price, Consensus and EPS Surprise Ball Corporation Price, Consensus and EPS Surprise

Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote

Segment Performance

The Beverage packaging North and Central America segment revenues increased to $1,519 million in third-quarter 2021 from the year-ago quarter’s $1,327 million. Operating earnings amounted to $186 million during the reported quarter, down 11% year over year.

Sales at the Beverage packaging, EMEA segment were $937 million in the third quarter, up 16% year over year. Operating earnings grew 7% year over year to $125 million.

The Beverage packaging South America segment’s revenues increased to $462 million in the reported quarter from the prior-year period’s $432 million. Operating earnings climbed 16% to $74 million from the year-earlier quarter’s $64 million.

In the Aerospace segment, sales were up 10.4% year over year to $498 million. Operating earnings slightly increased to $46 million from the year-ago quarter figure of $44 million. At the end of the quarter, the segment’s contracted backlog was $2.8 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 $1,446 million at the end of third-quarter 2021, up from $771 million at the end of the prior-year quarter. Cash flow generated from operating activities was $876 million in the first nine months of 2021 compared with the prior-year’s $345 million. The company’s long-term debt increased to $7.75 billion at the end of the third quarter from $7.68 billion at the prior-year quarter’s end.

Outlook

The global demand for aluminum packaging continues to grow as customers now prefer cans over glass and plastic. Demand for aerospace technologies will also be robust given the various long-term growth projects. The company expects to exceed its long-term diluted earnings per share growth goal of 10-15%.

Share Price Performance

Ball Corp's shares have gained 1.6% so far this year compared with the industry’s growth of 4.5%.

Zacks Rank and Stocks to Consider

Ball Corp currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Deere & Company (DE - Free Report) , Worthington Industries, Inc. (WOR - Free Report) and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere has an anticipated earnings growth rate of 117.6% for fiscal 2021. The company’s shares have increased 34.4%, year to date.

Worthington has an estimated earnings growth rate of 3.6% for fiscal 2022. Year to date, the company’s shares have gained 9.8%.

DXP Enterprises has a projected earnings growth rate of 77.6% for the current year. The stock has appreciated around 49%, so far this year.


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