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What's in Store for Crown Holdings (CCK) in Q1 Earnings?

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Crown Holdings, Inc. (CCK - Free Report) is scheduled to report first-quarter 2019 results, after closing bell on Apr 17.

In the last quarter, the company’s earnings per share improved 19% year over year but came in line with the Zacks Consensus Estimate. Nevertheless, the company surpassed estimates in two of the past four quarters, recording average positive surprise of 4.81%.

Let’s see how things are shaping up prior to this announcement.

Crown Holdings, Inc. Price and EPS Surprise

Key Factors

Positive impact of the Signode acquisition and improved beverage can volumes will drive revenues in the quarter. The company has been witnessing strong global beverage can demand as customers and consumers are favoring cans over other formats. However, the food can business is seasonal with the first quarter tending to be the slowest period as the autumn packaging period in the Northern Hemisphere ends and new crops haven’t been planted yet.  Further, the Americas Beverage, European Beverage and European Food segment results is likely to be hurt by currency fluctuations in first-quarter fiscal 2019.

The Zacks Consensus Estimate for sales is projected at $2.75 billion, up 25.2% year over year.

Crown Holdings projects adjusted diluted earnings per share for the first quarter 2019 in the range of $1.00-$1.10 compared with 94 cents recorded in the prior-year quarter. The company also anticipates incurring additional restructuring charges related to plant closures in the to-be-reported quarter. Moreover, higher raw material costs will impact earnings.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has gone down 1% over the last seven days. The Zacks Consensus Estimate for first-quarter 2019 is currently pegged at $1.05, reflecting year-over-year increase of 11.7%.

The Zacks Consensus Estimate for the Americas Beverage segment’s revenues is $772 million, a projected increase of 2% from $758 million in the prior-year quarter. The segment is expected to report operating profit of $102 million, up from $98 million in the prior-year quarter.

The European Beverage is expected to report revenues of $352 million, down 5% from the prior-year quarter. The segment is projected to report operating profit of $48 million, down from $55 million in the prior year quarter.

The Zacks Consensus Estimate for revenues for the European Food segment is currently pegged at $398 million compared with $428 million in the prior-year quarter. The segment is expected to report operating profit of $52 million, down 7% from $56 million in year-ago quarter.

The Asia-Pacific segment is expected to report revenues of $335 million, down 1% from the prior-year quarter. The segment is expected to report operating profit of $44 million, flat from the prior-year quarter.

Share Price Performance
 

Year to date, Crown Holdings outperformed the industry  with respect to price performance. The stock gained 35.3% while the industry recorded growth of 26.2%.

Earnings Whispers

Our proven model does not conclusively show that Crown Holdings is likely to beat on earnings in the to-be-reported quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: The Earnings ESP for Crown Holdings is -5.06%. This is because the Most Accurate estimate of $1.00 is lower than the Zacks Consensus Estimate of $1.05. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Crown Holdings carries a Zacks Rank #3, which increases the predictive power of ESP. But we need to have positive earnings ESP to be sure of earnings beat.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few Industrial Products stocks which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:

Sun Hydraulics Corporation has an Earnings ESP of +12.21% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Atkore International Group Inc. (ATKR - Free Report) has an Earnings ESP of +0.65% and a Zacks Rank #2.

Chart Industries, Inc. (GTLS - Free Report) has an Earnings ESP of +7.48% and a Zacks Rank #2.

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