) reported third-quarter 2013 adjusted earnings of $1.00 per
share, up 11% from the year-ago adjusted earnings of 90 cents per
share. The results also beat the Zacks Consensus Estimate of 93
cents. The year-over-year growth in earnings was led by
better-than-expected global beverage can volumes and an improved
seasonal vegetable harvest.
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Including after-tax charges of 22 cents a share, related to a
provision for customer receivable, business consolidation and
other costs, the company reported earnings from continuing
operations of 78 cents per share. This compared to earnings per
share of 74 cents in the year ago quarter.
Total revenue remained flat in the third quarter at $2.28 billion
from the year-ago quarter. Revenues marginally exceeded the Zacks
Consensus Estimate of $2.27 billion.
Cost of sales decreased 1% year over year to $1.8 billion. Gross
profit grew 3.5% year over year to $431 million, and gross margin
expanded 70 basis points (bps) to 18.9%.
Selling, general and administrative expenses increased 14.7% year
over year to $99 million. Adjusted operating income remained flat
at $255.4 million compared to the year- ago quarter.
Consequently, operating margin remained at 11.2%, flat with the
Metal Beverage Packaging, Americas & Asia
segment reported revenues of $1.1 billion in the reported quarter
compared with $1.2 billion in the year-ago quarter. Operating
earnings decreased 5% year over year to $134.8 million. The
segment's performance was affected by ceased production of
12-ounce beverage containers in the North American facility, but
was partially offset by volume growth in specialty containers.
Sales from the
Metal Beverage Packaging, Europe
segment increased 8.5% year over year to $488.9 million.
Operating earnings also rose 11% year over year to $60.5 million,
led by stronger-than-expected volume growth, improved operating
efficiencies and progress on cost-out initiatives.
Metal Food & Household Products Packaging
segment sales went up 4% year over year to $463.6 million.
Operating earnings increased 16.6% to $58.4 million from the year
ago quarter, driven by double-digit volume growth.
Aerospace and Technologies
segment, sales declined 1% year over year to $217.5 million.
Consequently, operating earnings decreased 20% year over year to
$18 million. The segment had a backlog of $942 million at the end
of the quarter.
Cash and cash equivalents were $168.2 million as of Sep 30, 2013
compared with $181.2 million as of Sep 30, 2012. Long-term debt
amounted to $3.4 billion as of Sep 30, 2013, up from $2.9 billion
as of Sep 30, 2012. Cash flow from operating activities for the
nine-month period went up 16.4% year over year to $451.9 million
from $388.3 million in the year-ago comparable period.
Ball Corporation retained its guidance of free cash flow of $450
million for full-year 2013, after capital expenditures of
approximately $400 million. The company expects net full-year
share buyback to be around $400 million.
The company will continue to benefit from product launches,
expansion into emerging markets and strong backlog in its
aerospace and technologies segment. Strong free cash flow,
dividends and share repurchases are also expected to generate
long-term shareholder value.
Moreover, the company sees growth potential in many segments.
Metal beverage packaging, Americas & Asia will benefit from
the Alagoinhas plant's third production line, which is on track.
However, uncertainty in the global economic scenario remains a
Broomfield, Colo.-based Ball Corporation is the largest
manufacturer of beverage cans in North America. It also supplies
aerospace and other technologies and services to the government
and to commercial customers.
Ball Corporation currently retains a short-term Zacks Rank #3
Mobile Mini, Inc.
) also belongs to the containers-metal/glass industry and holds a
Zacks Rank #2 (Buy).
Another company belonging to the same industry,
Silgan Holdings Inc.
) posted adjusted earnings of $1.23 per share in the third
quarter, up 5.1% year over year, but missed the Zacks Consensus
Estimate of $1.31. Ball's peer
EveryWare Global, Inc.
) is yet to announce its third-quarter results. The Zacks
Consensus Estimate for EveryWare currently stands at 14 cents for
the third quarter.