We are maintaining our Neutral recommendation on Ball Corporation
with a target price of $66. The company's adjusted earnings
improved 10% year over year to $1.10 per share. Total revenue,
however, declined 1.7% year over year due to weaker demand. Ball
Corp. revised its free cash flow guidance for 2014 and now expects
it to exceed $600 million. It has maintained its long-term earnings
per share growth goal of 10% 15%. Ball Corporation will continue to
benefit from a continued focus on cost containment, product
launches and expansion in the emerging markets. However,
uncertainty in the global economic scenario, manufacturing
challenges and tough volume comparisons remain headwinds.
Headquartered in Broomfield, Colo., Ball Corporation is a
manufacturer of metal and plastic packaging, primarily for
beverages and foods. It also supplies aerospace and other
technologies and services to government and commercial customers.
The company employs around 15,000 people worldwide and organizes
its businesses in 4 segments:
The Metal Beverage Packaging, Americas & Asia segment (49%
of total revenue in 2013) consists of operations located in the
U.S., Canada, Brazil, and People's Republic of China (PRC). In the
U.S., Canada and Brazil, the company manufactures metal container
products used primarily in beverage packaging. Ball's Chinese
operations manufacture metal beverage containers as well as
aluminum containers and ends.
The Metal Beverage Packaging, Europe segment (22%) deals with
the company's operations in Europe. The segment supplies two-piece
metal beverage containers and ends for producers of carbonated soft
drinks, beer, energy drinks and other beverages as well as extruded
aluminum aerosol containers and aluminum slugs.
The Metal Food & Household Products Packaging, Americas
segment (18%) is concerned with operations located in the U.S. and
Canada, which manufacture metal container products used primarily
in food packaging.
The Aerospace and Technologies segment (11%) includes national
defense solutions, advanced technologies and products as well as
civil and operational space businesses.
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