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Ball Corp (BALL) to Report Q4 Earnings: What's in Store?

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Ball Corporation (BALL - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 2, before the opening bell.

Q3 Performance

In the last reported quarter, Ball Corp’s earnings declined year over year despite an improvement in revenues. While revenues beat the Zacks Consensus Estimate, earnings missed the same. Over the trailing four quarters, BALL missed the Zacks Consensus Estimate in three of the quarters and missed once, the average surprise being a negative 2.4%.

Q4 Estimates

The Zacks Consensus Estimate for BALL’s fourth-quarter earnings per share is pegged at 54 cents, suggesting a decline of 44% from the prior-year quarter’s levels. The estimates have remained unchanged over the past 30 days. The Zacks Consensus Estimate for total sales is pegged at $3.53 billion, indicating a year-over-year decline of 4%.

Ball Corporation Price and EPS Surprise

 

Ball Corporation Price and EPS Surprise

Ball Corporation price-eps-surprise | Ball Corporation Quote

 

Factors to Note

Ball Corporation has lately witnessed weaker-than-expected demand as customer spending has been muted amid higher retail prices, particularly in the United States. This might get reflected in the company’s fourth-quarter performance. High input and labor costs due to supply constraints might have impacted the company’s performance in the quarter. Higher-than-expected start-up costs stemming from capacity-expansion measures are likely to have dented margin performance. BALL has been focused on improving its efficiency and reducing costs, which might have negated these impacts and boosted margins in the to-be-reported quarter.

Due to weak demand, the company recently announced the closure of its aluminum beverage can manufacturing facilities in Phoenix, AZ, and St. Paul, MN. The Phoenix facility is expected to have ceased production in the fourth quarter of 2022, followed by the St Paul facility in the first quarter of 2023. The closure of the Phoenix facility will likely impact the results of the Beverage Packaging, North and Central America segment in the to-be-reported quarter.

The Zacks Consensus Estimate for the Beverage packaging, North and Central America segment is pegged at $1,439 million for the December-end quarter indicating a 5% year-over-year decline. The segmental operating income is estimated at $132 million compared with the prior-year quarter’s $162 million. The segment’s results might have been impacted by the weakness in demand as mentioned above and inflated raw material and manufacturing costs.

The Beverage Packaging, EMEA segment’s fourth quarter 2022 results will likely bear the impact of higher inflation, energy costs and supply-chain disruptions across the region as well as the sale of the Russian aluminum beverage packaging business.

The Zacks Consensus Estimate for the Beverage packaging, South America segment’s net sales is pegged at $600 million, suggesting a 2% dip from the year-ago period’s levels. The segment’s operating income is pegged at $92 million, suggesting a 4% decline from the prior-year quarter’s $103 million.

The Zacks Consensus Estimate for the Beverage packaging, Europe segment’s sales is at $700 million for the to-be-reported quarter, indicating a 20% drop from the prior-year quarter’s $870 million. The segment’s operating income is projected at $55 million, suggesting a 47% plunge year over year. Elevated costs might have impacted the segment’s profits during the quarter under review.

The Aerospace segment’s contracted backlog remained strong at $3 billion as of the end of the third quarter of 2022. Contracts won but not yet booked into backlog stood at $4.6 billion. Program execution remains at a high level across the business. The segment continues to win and provide mission-critical programs and technologies to the U.S. government, defense, intelligence, reconnaissance and surveillance customers. This is likely to get reflected in the segment’s fourth-quarter top line.

The Zacks Consensus Estimate for the Aerospace segment's revenues is pegged at $517 million for the period in discussion, indicating a year-over-year improvement of 4%. The segment’s operating income is projected at $44.5 million, suggesting an 18% decline from last year quarter as the improvement in its revenues is likely to be offset by the supply-chain inefficiencies being faced by the segment.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Ball Corp this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today's Zacks #1 Rank stocks here.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Earnings ESP: BALL has an Earnings ESP of -1.40%.

Zacks Rank: Currently, the company carries a Zacks Rank of 2.

Price Performance

Zacks Investment Research
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Shares of Ball Corp have fallen 40.6% in the past year compared with the industry's 30.4% decline.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Deere & Co. (DE - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank of 2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings has moved 1.5% north in the past 60 days and is currently pegged at $5.51 per share. The consensus mark suggests year-over-year growth of 88.7%.

The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s reported level. DE has a trailing four-quarter earnings surprise of 7.1%, on average.

Xylem Inc. (XYL - Free Report) currently has an Earnings ESP of +0.63% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 60 days and is pegged at 79 cents per share. This suggests year-over-year growth of 25.4%.

The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.

Illinois Tool Works Inc. (ITW - Free Report) currently has an Earnings ESP of +1.92% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is pegged at $2.61 per share. This suggests year-over-year growth of 33.8%.

The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s reported level. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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