We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Crown (CCK) Down 6.2% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Crown Holdings (CCK - Free Report) . Shares have lost about 6.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crown due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Crown Holdings Q1 Earnings & Sales Top Estimates, Up Y/Y
Crown Holdings reported first-quarter 2022 adjusted 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Crown has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Crown (CCK) Down 6.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Crown Holdings (CCK - Free Report) . Shares have lost about 6.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crown due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Crown Holdings Q1 Earnings & Sales Top Estimates, Up Y/Y
Crown Holdings reported first-quarter 2022 adjusted 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Crown has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.