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Crown Holdings (CCK) Q4 Earnings & Sales Top Estimates, Up Y/Y

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Crown Holdings, Inc. (CCK - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of $1.66, outpacing the Zacks Consensus Estimate of $1.54. The bottom line rose 10.6% year over year and surpassed the EPS guidance of $1.50 and $1.55.

Including one-time items, the company incurred a loss of $7.95 per share in the quarter under review, against earnings of $1.12 in the fourth quarter of 2020.

Net sales in the quarter totaled $3,054 million, up from the year-ago quarter’s $2,460 million. The top line benefited from increased beverage can and transit packaging sales unit volumes and pass through of higher material costs. The reported figure beat the Zacks Consensus Estimate of $2,796 million.

Cost and Margins

The cost of products sold increased 31% year over year to $2,481 million. On a year-over-year basis, gross profit moved up 1.8% to $573 million. Gross margin contracted to 18.8% from the year-ago quarter’s 22.9%.

Selling and administrative expenses rose 4.3% year over year to $145 million. Segment operating income came in at $357 million during the quarter under review compared with the prior-year quarter’s $358 million. The operating margin came in at 11.7% compared with 14.5% in the prior-year quarter.

Crown Holdings, Inc. Price, Consensus and EPS Surprise

 

Crown Holdings, Inc. Price, Consensus and EPS Surprise

Crown Holdings, Inc. price-consensus-eps-surprise-chart | Crown Holdings, Inc. Quote

 

Segment Performance

Net sales in the Americas Beverage segment totaled $1,201 million, up 25% year over year. Segment operating profit declined 7.6% year over year to $181 million.

The European Beverage segment’s sales were up 22% year over year to $462 million. Operating income came in at $43 million compared with the year-ago quarter’s $63 million.

The Asia-Pacific segment’s revenues totaled $381 million, reflecting year-over-year growth of 21%. Operating profit was $51 million compared with the prior-year quarter’s $50 million.

Revenues in the Transit Packaging segment totaled $692 million compared with the year-ago quarter’s $523 million. Operating profit climbed 28% year over year to $83 million.

Financial Update

Crown Holdings had cash and cash equivalents of $531 million at the end of 2021, down from $1,173 million at 2020-end. The company generated $905 million cash from operating activities in 2021 compared with $1,315 million in 2020. In 2021, the company returned more than $1 billion to shareholders.

Crown Holdings’ long-term debt declined to $6,052 million as of Dec 31, 2021, from $8,023 million as of Dec 31, 2020.

Business Update

During the quarter, Crown Holdings completed the sale of its European Tinplate businesses and fully settled its U.K. pension obligations. Consequently, pension obligations were reduced by approximately $3 billion.

2021 Performance

Crown Holdings reported an adjusted EPS of $7.66 in 2021 compared with $5.92 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $7.54. Including one-time items, the company reported a loss per share of $4.30 against earnings of $4.30 per share in 2020.

Sales were up 21% year over year to $11.4 billion. The top line missed the Zacks Consensus Estimate of $11.6 billion.

Outlook

Crown Holdings projects first-quarter 2022 adjusted EPS between $1.80 and $1.90. For the current year, the company anticipates adjusted EPS in the range of $8.00-$8.20. EBITDA is expected to grow more than 12% to approximately $2 billion.

Beverage can demand growth remains strong and the company is expected to benefit from this trend. Crown Holdings continues to implement several beverage-can capacity-expansion projects to meet the surging beverage-can demand. The company is focused on the construction of new plants and the addition of production lines to its existing facilities.

Price Performance

Crown Holdings’ shares have appreciated 17.2% in the past year compared with the industry’s growth of 7.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank and Stocks to Consider

Crown Holdings currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . While DOV sports a Zacks Rank #1 (Strong Buy), SLGN and AIT carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.

Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4%. DOV’s shares have rallied around 44.5% in a year.

Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.

Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 19.7%.

Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.

Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 36% in a year.