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Ball Corporation reported first-quarter 2022 adjusted earnings of 77 cents per share, missing the Zacks Consensus Estimate of 83 cents. The bottom line increased 7% year over year.
On a reported basis, the company’s earnings were $1.37 per share compared with the prior-year quarter’s 60 cents.
Total sales came in at $3,716 million in the reported quarter, up 19% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $3,546 million. All the segments reported higher sales volume on the back of higher shipments and contractual pass-through of higher aluminum costs. In the quarter, global beverage-can volumes were up 13%.
Operational Update
Cost of sales amounted to $3,016 million in first-quarter 2022, up 21% from the year-ago quarter’s levels. The gross profit totaled $700 million compared with the year-ago quarter’s $632 million. The gross margin came in at 18.8%, down from the prior-year quarter’s 20.2%.
Selling, general and administrative expenses increased 18% year over year to $186 million. The adjusted operating profit was $366 million compared with the prior-year quarter’s $345 million. The adjusted operating margin came in at 9.8% compared with the prior-year quarter’s 11%.
Ball Corporation Price, Consensus and EPS Surprise
The Beverage packaging North and Central America segment revenues increased 24% year over year to $1,609 million in the first quarter. Operating earnings amounted to $174 million, up 24% year over year.
Sales at the Beverage packaging, EMEA segment were $942 million in the quarter, up 18% year over year. Operating earnings came in at $100 million, flat year over year.
The Beverage packaging South America segment’s revenues were $494 million in the reported quarter, up 1.4% year over year. Operating earnings were down 16% to $78 million.
The Aerospace segment’s sales were up 19% year over year to $504 million. Operating earnings increased 23% to $43 million. At the end of the quarter, the segment’s contracted backlog was $3.2 billion. Contracts already won but not yet booked into the current contracted backlog were $4.1 billion.
Financial Condition
The company reported cash and cash equivalents of $437 million at the end of first-quarter 2022, down from $461 million at the end of the prior-year quarter. Cash utilized in operating activities amounted to $804 million in the first quarter compared with $477 million in the comparable period last year.
Ball Corp is well poised to return approximately $1.75 billion to shareholders through the year while investing $1.8 billion on capital expenditures. The company’s long-term debt increased to $8.3 billion at the end of the first quarter from $6.9 billion at the end of the year-ago quarter.
Outlook
Ball Corporation is well poised to increase cash from operations and adjusted EPS through accelerating shareholder returns in the form of share repurchases and dividends in 2022. Its Drive for 10 vision, disciplined capital allocation and robust demand for sustainable packaging and technologies bode well for the company. It maintains its expectation to exceed its long-term diluted earnings per share growth goal of 10-15%.
Business Update
Ball Corporation has decided to reduce operations at its three manufacturing plants in Russia while evaluating the option of selling its Russian business, which is part of the Beverage packaging, EMEA segment. This business contributed 4% to the company's total net sales and 8% to total comparable operating earnings in 2021. Additionally, its plants in Russia accounted for approximately 5% of the company's 112.5 billion global beverage can unit shipments for the 12 months ended Dec 31, 2021.
Price Performance
The company’s shares have depreciated 8.1% over the past year compared with the industry’s loss of 4.4%.
Image Source: Zacks Investment Research
Zacks Rank and Key Picks
Ball Corp currently carries a Zacks #4 Rank (Sell).
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 69.3% 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’s 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 5.4% in the past year.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year’s time.
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Ball Corp (BLL) Q1 Earnings Miss, Sales Beat Estimates, Up Y/Y
Ball Corporation reported first-quarter 2022 adjusted earnings of 77 cents per share, missing the Zacks Consensus Estimate of 83 cents. The bottom line increased 7% year over year.
On a reported basis, the company’s earnings were $1.37 per share compared with the prior-year quarter’s 60 cents.
Total sales came in at $3,716 million in the reported quarter, up 19% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $3,546 million. All the segments reported higher sales volume on the back of higher shipments and contractual pass-through of higher aluminum costs. In the quarter, global beverage-can volumes were up 13%.
Operational Update
Cost of sales amounted to $3,016 million in first-quarter 2022, up 21% from the year-ago quarter’s levels. The gross profit totaled $700 million compared with the year-ago quarter’s $632 million. The gross margin came in at 18.8%, down from the prior-year quarter’s 20.2%.
Selling, general and administrative expenses increased 18% year over year to $186 million. The adjusted operating profit was $366 million compared with the prior-year quarter’s $345 million. The adjusted operating margin came in at 9.8% compared with the prior-year quarter’s 11%.
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 24% year over year to $1,609 million in the first quarter. Operating earnings amounted to $174 million, up 24% year over year.
Sales at the Beverage packaging, EMEA segment were $942 million in the quarter, up 18% year over year. Operating earnings came in at $100 million, flat year over year.
The Beverage packaging South America segment’s revenues were $494 million in the reported quarter, up 1.4% year over year. Operating earnings were down 16% to $78 million.
The Aerospace segment’s sales were up 19% year over year to $504 million. Operating earnings increased 23% to $43 million. At the end of the quarter, the segment’s contracted backlog was $3.2 billion. Contracts already won but not yet booked into the current contracted backlog were $4.1 billion.
Financial Condition
The company reported cash and cash equivalents of $437 million at the end of first-quarter 2022, down from $461 million at the end of the prior-year quarter. Cash utilized in operating activities amounted to $804 million in the first quarter compared with $477 million in the comparable period last year.
Ball Corp is well poised to return approximately $1.75 billion to shareholders through the year while investing $1.8 billion on capital expenditures. The company’s long-term debt increased to $8.3 billion at the end of the first quarter from $6.9 billion at the end of the year-ago quarter.
Outlook
Ball Corporation is well poised to increase cash from operations and adjusted EPS through accelerating shareholder returns in the form of share repurchases and dividends in 2022. Its Drive for 10 vision, disciplined capital allocation and robust demand for sustainable packaging and technologies bode well for the company. It maintains its expectation to exceed its long-term diluted earnings per share growth goal of 10-15%.
Business Update
Ball Corporation has decided to reduce operations at its three manufacturing plants in Russia while evaluating the option of selling its Russian business, which is part of the Beverage packaging, EMEA segment. This business contributed 4% to the company's total net sales and 8% to total comparable operating earnings in 2021. Additionally, its plants in Russia accounted for approximately 5% of the company's 112.5 billion global beverage can unit shipments for the 12 months ended Dec 31, 2021.
Price Performance
The company’s shares have depreciated 8.1% over the past year compared with the industry’s loss of 4.4%.
Image Source: Zacks Investment Research
Zacks Rank and Key Picks
Ball Corp currently carries a Zacks #4 Rank (Sell).
Some better-ranked stocks in the Industrial Products sector are Alcoa (AA - Free Report) , Packaging Corporation of America (PKG - Free Report) and Graphic Packaging Holding Company (GPK - Free Report) . All of these stocks flaunt a Zacks Rank #1 (Strong 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 69.3% 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’s 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 5.4% in the past year.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 14.8% in a year’s time.