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Crown Holdings (CCK) Q1 Earnings & Sales Top Estimates, Up Y/Y
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Crown Holdings, Inc. (CCK - Free Report) reported first-quarter 2022 adjusted earnings per share (EPS) of $2.01, beating the Zacks Consensus Estimate of $1.82. The bottom line rose 9.8% year over year and surpassed the EPS guidance of $1.80-$1.90.
Including one-time items, the company reported earnings of $1.74 per share in the quarter under review compared with $1.57 per share in the first quarter of 2021.
Net sales in the quarter totaled $3,162 million, up from the year-ago quarter’s $2,564 million. The top line benefited from increased beverage sales unit volumes and pass-through of higher material costs. The reported figure surpassed the Zacks Consensus Estimate of $3,011 million.
Cost and Margins
The cost of products sold increased 29% year over year to $2,547 million. On a year-over-year basis, gross profit moved up 6% to $615 million. Gross margin contracted to 19.4% from the year-ago quarter’s 22.6%.
Selling and administrative expenses rose 9.8% year over year to $157 million. Segment operating income came in at $383 million during the quarter under review compared with the prior-year quarter’s $369 million. The operating margin came in at 12.1% compared with 14.4% in the prior-year quarter.
Crown Holdings, Inc. Price, Consensus and EPS Surprise
Net sales in the Americas Beverage segment totaled $1,226 million, up 23% year over year. Segment operating profit declined 13% year over year to $164 million.
The European Beverage segment’s sales rallied 31% year over year to $510 million. Operating income came in at $53 million compared with the year-ago quarter’s $62 million.
The Asia-Pacific segment’s revenues totaled $413 million, up 25% year over year. Operating profit was $53 million compared with the prior-year quarter’s $52 million.
Revenues in the Transit Packaging segment totaled $657 million compared with the year-ago quarter’s $557 million. Operating profit declined 13% year over year to $61 million.
Financial Update
Crown Holdings had cash and cash equivalents of $389 million at the end of first-quarter 2022, down from $588 million at the end of the prior-year quarter. The company utilized $301 million cash in operating activities in the first quarter compared with $385 million in the year-ago quarter.
Crown Holdings’ long-term debt declined to $5,654 million as of Mar 31, 2022, from $7,875 million as of Mar 31, 2021.
Business Update
During the quarter, Crown Holdings entered into an agreement to sell the Transit Packaging segment's Kiwiplan business for $182 million. The deal is expected to close during second-quarter 2022. The company expects to record an after-tax gain of approximately $100 million related to the transaction with net proceeds, after taxes and other transaction-related costs, expected to be utilized for debt reduction, fund capital projects and repurchase shares over time.
Outlook
Crown Holdings projects second-quarter 2022 adjusted EPS between $2.00 and $2.10. For the current year, the company anticipates adjusted EPS in the band of $8.00-$8.20.
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 demand. The company is focused on constructing new plants and the addition of production lines to its existing facilities.
Price Performance
Crown Holdings’ shares have declined 1.3% in the past year compared with the industry’s fall of 1.3%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Crown Holdings currently carries a Zacks Rank #3 (Hold).
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 9.7% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.
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Crown Holdings (CCK) Q1 Earnings & Sales Top Estimates, Up Y/Y
Crown Holdings, Inc. (CCK - Free Report) reported first-quarter 2022 adjusted earnings per share (EPS) of $2.01, beating the Zacks Consensus Estimate of $1.82. The bottom line rose 9.8% year over year and surpassed the EPS guidance of $1.80-$1.90.
Including one-time items, the company reported earnings of $1.74 per share in the quarter under review compared with $1.57 per share in the first quarter of 2021.
Net sales in the quarter totaled $3,162 million, up from the year-ago quarter’s $2,564 million. The top line benefited from increased beverage sales unit volumes and pass-through of higher material costs. The reported figure surpassed the Zacks Consensus Estimate of $3,011 million.
Cost and Margins
The cost of products sold increased 29% year over year to $2,547 million. On a year-over-year basis, gross profit moved up 6% to $615 million. Gross margin contracted to 19.4% from the year-ago quarter’s 22.6%.
Selling and administrative expenses rose 9.8% year over year to $157 million. Segment operating income came in at $383 million during the quarter under review compared with the prior-year quarter’s $369 million. The operating margin came in at 12.1% compared with 14.4% in the prior-year quarter.
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 $1,226 million, up 23% year over year. Segment operating profit declined 13% year over year to $164 million.
The European Beverage segment’s sales rallied 31% year over year to $510 million. Operating income came in at $53 million compared with the year-ago quarter’s $62 million.
The Asia-Pacific segment’s revenues totaled $413 million, up 25% year over year. Operating profit was $53 million compared with the prior-year quarter’s $52 million.
Revenues in the Transit Packaging segment totaled $657 million compared with the year-ago quarter’s $557 million. Operating profit declined 13% year over year to $61 million.
Financial Update
Crown Holdings had cash and cash equivalents of $389 million at the end of first-quarter 2022, down from $588 million at the end of the prior-year quarter. The company utilized $301 million cash in operating activities in the first quarter compared with $385 million in the year-ago quarter.
Crown Holdings’ long-term debt declined to $5,654 million as of Mar 31, 2022, from $7,875 million as of Mar 31, 2021.
Business Update
During the quarter, Crown Holdings entered into an agreement to sell the Transit Packaging segment's Kiwiplan business for $182 million. The deal is expected to close during second-quarter 2022. The company expects to record an after-tax gain of approximately $100 million related to the transaction with net proceeds, after taxes and other transaction-related costs, expected to be utilized for debt reduction, fund capital projects and repurchase shares over time.
Outlook
Crown Holdings projects second-quarter 2022 adjusted EPS between $2.00 and $2.10. For the current year, the company anticipates adjusted EPS in the band of $8.00-$8.20.
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 demand. The company is focused on constructing new plants and the addition of production lines to its existing facilities.
Price Performance
Crown Holdings’ shares have declined 1.3% in the past year compared with the industry’s fall of 1.3%.
Image 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 are Alcoa (AA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Greif Inc. (GEF - Free Report) . While AA and PKG flaunt a Zacks Rank #1 (Strong Buy), GEF carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcoa has a projected earnings growth rate of 107% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 76% in the past 60 days.
Alcoa delivered a trailing four-quarter earnings surprise of 17.4% on average. Alcoa’s shares have surged 81% in the past year.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year earnings has moved up 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have gained 9.7% in the past year.
Greif has an estimated earnings growth rate of 16% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 4.2%.
GEF pulled off a trailing four-quarter earnings surprise of 14.7%, on average. The company’s shares have appreciated 5% in a year’s time.