Crown Holdings, Inc.
) reported third-quarter 2013 adjusted earnings of $1.13 per
share, up 13% from the year-ago quarter. The results beat the
Zacks Consensus Estimate of $1.08.
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Last month, management reduced its third quarter earnings
guidance from $1.15-$1.25 to $1.05-$1.10 per share citing
weaker-than-expected demand in European food cans and North
American beverage can markets. However, earnings surpassed the
company's revised guidance on strong sales.
On a reported basis, earnings came in at 81 cents per share
compared with $2.20 in the prior-year quarter. Both quarters'
earnings include restructuring charges, gains on asset sales and
Net sales rose 2.8% year over year to $2.39 billion. The
year-over-year rise was mainly attributable to an increase in
global beverage can volumes (6%) and favorable foreign currency
translation, partly offset by the pass-through of lower raw
material costs. New beverage can plants and capacity in Turkey,
Brazil, China and Southeast Asia resulted in volume growth. The
results managed to surpass the Zacks Consensus Estimate of $2.37
Cost of products sold increased 4% year over year to $1.96
billion. Gross profit surged 6.8% year over year to $394 million.
Gross margin expanded 50 basis points to 16.5% in the quarter.
Selling, general and administrative expenses increased 3% to $95
million. Adjusted operating income jumped 8% to $299 million from
the year-ago quarter. Operating margin increased 50 basis points
Net sales from the
segment amounted to $583 million, up 1.6% year over year.
Segment operating profit rose 1.2% to $83 million from $82
million in the year-ago quarter.
North America Food
segment reported revenues of $249 million compared with $259
million in the year-ago quarter. Operating earnings were $44
million, flat with the prior-year quarter.
segment sales went up 6.6% year over year to $481 million.
Consequently, operating income climbed 20.6% year over year to
segment, sales declined to $543 million from $547 million in the
year-ago quarter. Segment operating income also declined 1.5%
year over year to $63 million.
Revenues in the
segment increased 21.9% over year to $300 million. However,
operating profit fell 11% to $32 million from the year-ago
As of Sep 30, 2013, Crown Holdings had cash and cash equivalents
of $236 million, down from $240 million as of Sep 30, 2012. Total
debt of the company increased to $4.0 billion as of Sep 30, 2013
from $3.8 billion as of Sep 30, 2012.
Total cash flow used in operating activities was $124 million for
the period of nine months ended Sep 30, 2013, compared with $117
million in the comparable period last year. Free cash flow in the
reported quarter was $70 million compared with $34 million in the
prior-year quarter. During the quarter, Crown Holdings
repurchased 2.5 million shares for $106 million.
Crown Holdings aims to expand the beverage cans volume worldwide,
especially in the growth markets. In addition, management remains
optimistic about performance, based on a uniquely balanced
product portfolio and geographic presence of high quality metal
packaging. These will drive future unit volume, free cash flow
and profit growth. Crown Holdings also expects food can demand to
rebound owing to the improvement of the European economy.
Philadelphia-based Crown is a leading supplier of packaging
products to consumer marketing companies. The company
manufactures aluminum beverage cans, food cans, aerosol cans and
other packaging products.
Mobile Mini, Inc.
) also belongs to the same industry wherein Crown Holdings
operates and holds a Zacks Rank #2 (Buy). Crown Holdings' peers
EveryWare Global, Inc.
) are yet to announce their quarterly results.
Crown Holdings currently retains a Zacks Rank #5 (Strong