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Ball Corp (BALL) Q3 Earnings Miss Estimates, Decrease Y/Y
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Ball Corporation (BALL - Free Report) reported third-quarter 2022 adjusted earnings of 75 cents per share, missing the Zacks Consensus Estimate of 76 cents. The bottom line declined 20% year over year due to an unfavorable currency impact, higher manufacturing and other costs. The company also noted that customer demand was lower than expected owing to higher retail prices, particularly in the United States.
On a reported basis, the company reported earnings per share of $1.24 against the prior-year quarter’s earnings per share of 54 cents. BALL recorded gains related to the sale of Russian operations during the quarter.
Total sales were $3,951 million in the reported quarter, up 11.2% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $3,930 million. Global beverage can shipments were up 5.7%.
Ball Corporation Price, Consensus and EPS Surprise
The cost of sales amounted to $3,275 million in third-quarter 2022, up 15% from the year-ago quarter. The gross profit totaled $676 million, down from the year-ago quarter’s $702 million. The gross margin came in at 17.1%, a contraction from the prior-year quarter’s 19.8%.
Selling, general and administrative expenses rose 7% year over year to $159 million. Adjusted operating profit was $523 million compared with the prior-year quarter’s $238 million. Adjusted operating margin came in at 13.2%, a 650 basis point expansion from the prior-year quarter.
Segment Performance
The Beverage packaging North and Central America segment revenues increased 18.5% year over year to $1,800 million in the third quarter. Operating earnings amounted to $205 million, up 10% year over year.
Sales in the Beverage packaging, EMEA segment were $1,031 million in the quarter, up 10% year over year. Operating earnings were $82 million, marking a 34% plunge year over year.
The Beverage packaging South America segment’s revenues inched up 1% year over year to $466 million in the reported quarter. Operating earnings dipped 9.5% to $67 million.
The Aerospace segment’s sales were down 4% year over year to $477 million. Operating earnings increased 2% to $47 million. At the end of the quarter, the segment’s contracted backlog was $3 billion. Contracts already won but not yet booked into the current contracted backlog were $4.6 billion.
Financial Condition
The company reported cash and cash equivalents of $473 million at the end of third-quarter 2022, down from $1,446 million at the end of the prior-year quarter. Cash utilized in operating activities amounted to $224 million in the first nine-month period of 2022 compared with an inflow of $876 million in the comparable period last year.
Ball Corp had developed and executed a plan to deliver at least $150 million of combined fixed and variable cost savings in 2023. The company’s long-term debt increased to $8.4 billion at the end of the third quarter from $7.8 billion at the end of the year-ago quarter.
Price Performance
Image Source: Zacks Investment Research
The company’s shares have lost 49.2% over the past year compared with the industry’s decline of 40.8%.
Zacks Rank and Key Picks
Ball Corp currently carries a Zacks #4 Rank (Sell).
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 36% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 18% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 34% in the past year.
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Ball Corp (BALL) Q3 Earnings Miss Estimates, Decrease Y/Y
Ball Corporation (BALL - Free Report) reported third-quarter 2022 adjusted earnings of 75 cents per share, missing the Zacks Consensus Estimate of 76 cents. The bottom line declined 20% year over year due to an unfavorable currency impact, higher manufacturing and other costs. The company also noted that customer demand was lower than expected owing to higher retail prices, particularly in the United States.
On a reported basis, the company reported earnings per share of $1.24 against the prior-year quarter’s earnings per share of 54 cents. BALL recorded gains related to the sale of Russian operations during the quarter.
Total sales were $3,951 million in the reported quarter, up 11.2% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $3,930 million. Global beverage can shipments were up 5.7%.
Ball Corporation Price, Consensus and EPS Surprise
Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote
Operational Update
The cost of sales amounted to $3,275 million in third-quarter 2022, up 15% from the year-ago quarter. The gross profit totaled $676 million, down from the year-ago quarter’s $702 million. The gross margin came in at 17.1%, a contraction from the prior-year quarter’s 19.8%.
Selling, general and administrative expenses rose 7% year over year to $159 million. Adjusted operating profit was $523 million compared with the prior-year quarter’s $238 million. Adjusted operating margin came in at 13.2%, a 650 basis point expansion from the prior-year quarter.
Segment Performance
The Beverage packaging North and Central America segment revenues increased 18.5% year over year to $1,800 million in the third quarter. Operating earnings amounted to $205 million, up 10% year over year.
Sales in the Beverage packaging, EMEA segment were $1,031 million in the quarter, up 10% year over year. Operating earnings were $82 million, marking a 34% plunge year over year.
The Beverage packaging South America segment’s revenues inched up 1% year over year to $466 million in the reported quarter. Operating earnings dipped 9.5% to $67 million.
The Aerospace segment’s sales were down 4% year over year to $477 million. Operating earnings increased 2% to $47 million. At the end of the quarter, the segment’s contracted backlog was $3 billion. Contracts already won but not yet booked into the current contracted backlog were $4.6 billion.
Financial Condition
The company reported cash and cash equivalents of $473 million at the end of third-quarter 2022, down from $1,446 million at the end of the prior-year quarter. Cash utilized in operating activities amounted to $224 million in the first nine-month period of 2022 compared with an inflow of $876 million in the comparable period last year.
Ball Corp had developed and executed a plan to deliver at least $150 million of combined fixed and variable cost savings in 2023. The company’s long-term debt increased to $8.4 billion at the end of the third quarter from $7.8 billion at the end of the year-ago quarter.
Price Performance
Image Source: Zacks Investment Research
The company’s shares have lost 49.2% over the past year compared with the industry’s decline of 40.8%.
Zacks Rank and Key Picks
Ball Corp currently carries a Zacks #4 Rank (Sell).
Some better-ranked stocks from the Industrial Products sector are Tenaris (TS - Free Report) , Enerpac Tool Group Corp. (EPAC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) . While TS and EPAC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 36% in the past year.
Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 18% in the past year.
Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 34% in the past year.