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Crown Holdings (CCK) Up 1.7% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Crown Holdings, Inc. (CCK - Free Report) . Shares have added about 1.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Crown Holdings Beats Earnings & Sales Estimates in Q1
Crown Holdings reported first-quarter 2017 adjusted earnings per share of $0.72, which came ahead of the Zacks Consensus Estimate of $0.70 and inched up 3% year over year. Earnings came within management’s guidance of $0.65–$0.75.
On a reported basis, earnings came in at $0.77 per share, up 35% from $0.57 in the prior-year quarter.
Net sales in the quarter edged up 0.4% year over year to $1,901 million. Revenues beat the Zacks Consensus Estimate of $1,888 million. Improved beverage, food and aerosol can volumes, and the pass through of higher material costs to customers were partially offset by negative impact of currency translation.
Cost of products sold remained flat year over year at $1,519 million. On a year-over-year basis, gross profit rose 3% to $382 million, while gross margin expanding 40 basis points (bps) to 20.1% in the quarter.
Selling and administrative expenses declined 1% year over year to $90 million. Adjusted segment operating income improved 5% year over year to $233 million in the quarter. Operating margin expanded 60 bps to 12.3% from 11.7% in the year-ago quarter.
Segment Performance
Net sales from the Americas Beverage segment were $674 million, down 2% from $688 million in the year-ago quarter. Segment operating profit dipped 2% to $105 million from $107 million in the year-ago quarter.
The North-America Food segment’s sales went down 0.6% year over year to $153 million. Operating earnings remained flat year over year at $16 million.
The European Beverage segment’s sales dropped 4% year over year to $303 million. However, operating income declined 5% year over year to $39 million.
Revenues in the European Food segment were down 4% year over year to $396 million. Segment operating profit went down 2% to $51 million from $52 million in the year-ago quarter.
Revenues in the Asia-Pacific segment decreased 1% year over year to $278 million. Operating profit remained flat at $39 million in the reported quarter.
Financial Update
Crown Holdings had cash and cash equivalents of $338 million at the end of the first quarter compared with $257 million at the end of the prior-year quarter. Cash used in operations was $320 million in the quarter compared with $408 million in the prior-year quarter. Adjusted free cash flow was $427 million in first-quarter 2017 compared with $437 million in the prior-year quarter. As of the quarter end, Crown Holdings’ total debt fell to $5.3 billion from $5.6 billion as of the prior-year quarter end.
Crown Holdings repurchased $133 million of shares in the quarter followed by an additional $60 million in April.
Outlook
The company currently expects 2017 adjusted diluted earnings per share to be in the range of $3.80–$4.00. Adjusted diluted earnings per share for the second quarter are projected in the range of $1.05–$1.15.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared to one lower.
At this time, Crown Holdings' stock has a poor Growth Score of 'F'. However, its Momentum is doing a bit better with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable solely for value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line return from the stock in the next few months.
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Crown Holdings (CCK) Up 1.7% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Crown Holdings, Inc. (CCK - Free Report) . Shares have added about 1.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Crown Holdings Beats Earnings & Sales Estimates in Q1
Crown Holdings reported first-quarter 2017 adjusted earnings per share of $0.72, which came ahead of the Zacks Consensus Estimate of $0.70 and inched up 3% year over year. Earnings came within management’s guidance of $0.65–$0.75.
On a reported basis, earnings came in at $0.77 per share, up 35% from $0.57 in the prior-year quarter.
Net sales in the quarter edged up 0.4% year over year to $1,901 million. Revenues beat the Zacks Consensus Estimate of $1,888 million. Improved beverage, food and aerosol can volumes, and the pass through of higher material costs to customers were partially offset by negative impact of currency translation.
Cost of products sold remained flat year over year at $1,519 million. On a year-over-year basis, gross profit rose 3% to $382 million, while gross margin expanding 40 basis points (bps) to 20.1% in the quarter.
Selling and administrative expenses declined 1% year over year to $90 million. Adjusted segment operating income improved 5% year over year to $233 million in the quarter. Operating margin expanded 60 bps to 12.3% from 11.7% in the year-ago quarter.
Segment Performance
Net sales from the Americas Beverage segment were $674 million, down 2% from $688 million in the year-ago quarter. Segment operating profit dipped 2% to $105 million from $107 million in the year-ago quarter.
The North-America Food segment’s sales went down 0.6% year over year to $153 million. Operating earnings remained flat year over year at $16 million.
The European Beverage segment’s sales dropped 4% year over year to $303 million. However, operating income declined 5% year over year to $39 million.
Revenues in the European Food segment were down 4% year over year to $396 million. Segment operating profit went down 2% to $51 million from $52 million in the year-ago quarter.
Revenues in the Asia-Pacific segment decreased 1% year over year to $278 million. Operating profit remained flat at $39 million in the reported quarter.
Financial Update
Crown Holdings had cash and cash equivalents of $338 million at the end of the first quarter compared with $257 million at the end of the prior-year quarter. Cash used in operations was $320 million in the quarter compared with $408 million in the prior-year quarter. Adjusted free cash flow was $427 million in first-quarter 2017 compared with $437 million in the prior-year quarter. As of the quarter end, Crown Holdings’ total debt fell to $5.3 billion from $5.6 billion as of the prior-year quarter end.
Crown Holdings repurchased $133 million of shares in the quarter followed by an additional $60 million in April.
Outlook
The company currently expects 2017 adjusted diluted earnings per share to be in the range of $3.80–$4.00. Adjusted diluted earnings per share for the second quarter are projected in the range of $1.05–$1.15.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared to one lower.
Crown Holdings, Inc. Price and Consensus
Crown Holdings, Inc. Price and Consensus | Crown Holdings, Inc. Quote
VGM Scores
At this time, Crown Holdings' stock has a poor Growth Score of 'F'. However, its Momentum is doing a bit better with a 'D'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable solely for value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line return from the stock in the next few months.