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Crown Holdings (CCK) to Report Q2 Earnings: What's in Store?

Crown Holdings, Inc. CCK is scheduled to report second-quarter 2020 results, after the closing bell on Jul 20.

The company reported better-than-expected results in first-quarter 2020. Both revenues and earnings beat the Zacks Consensus Estimate and improved year over year.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter total sales is pegged at $2.80 billion, indicating a decline of 7.7% from the year-ago quarter. The estimate for earnings is currently stands at $1.31, suggesting a decline of 10.3% from the prior-year reported figure. The estimate has gone down 1% over the past 30 days.

The company has surpassed the Zacks Consensus Estimate twice in the trailing four quarters, while missing the remaining two. It has a trailing four-quarter earnings surprise of 7.08%, on average.

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. price-eps-surprise | Crown Holdings, Inc. Quote

Factors to Note

Crown Holdings’ products are significant part of food and beverage supply chains. In addition to manufacturing containers that provide protection for food and beverages, the company also produces closures for baby food, aerosol containers for cleaning and sanitizing products and numerous products that provide for the safe and secure transportation of goods in transit. This, in turn, is likely to get reflected in the company’s second-quarter results despite the coronavirus pandemic.

With its many inherent benefits, including being infinitely recyclable, the beverage can is currently the preferred package for marketers and consumers. The company might have benefited from the ongoing strength in global beverage-can demand in the quarter to be reported, particularly in North America. However, the coronavirus pandemic impacted demand in certain areas such as Brazil, Mexico, Southeast Asia and Europe, which is likely to weigh on the results. Further, the pandemic may have impacted the company’s operations and supply chain on account of restrictions imposed by governments. Nevertheless, the company’s ongoing cost-control measures might get reflected in the to-be-reported quarter’s performance.

Q2 Segment Expectations

In North America, the company continued to witness strong beverage demand as consumers have been increasingly preferring cans over other packaging. The second quarter was not an exception to this trend. The Zacks Consensus Estimate for the Americas Beverage segment’s revenues is pegged at $828 million, indicating a decline of 7% from the prior-year quarter. The segment is expected to report an operating profit of $121 million, down from $139 million witnessed in the year-earlier quarter.

The European Beverage segment’s second-quarter results are likely to be impacted as the Seville plant was down as the company completed the conversion from steel to aluminum. Also, the slowdown in beverage can demand in Italy, Turkey and the U.K due to the adverse impact of the coronavirus outbreak might reflect on the segment’s results. The European Beverage is expected to record revenues of $371 million compared with the $410 million generated in the year-ago period. The segment is projected to report an operating profit of $50 million, suggesting a decline of 17% from the prior-year quarter.

The Zacks Consensus Estimate for the European Food segment’s revenues is currently pegged at $460 million compared with the year-earlier quarter’s $483 million. Notably, the European food can market has been witnessing lower volumes in recent years due to challenging harvest yields. The estimate for the segment’s operating profit for the second quarter is currently pegged at $65 million, indicating an improvement of 5% from $62 million in year-ago quarter.

The Asia-Pacific segment is anticipated to generate revenues of $293 million, down from the $319 million reported in the prior-year quarter owing to lower demand amid the pandemic. The segment is likely to report an operating profit of $43.6 million, down from the prior-year quarter’s $51 million.

The Transit Packaging segment supplies a wide array of industrial markets, which have been affected by a decline in global economic activity amid the coronavirus pandemic. The Zacks Consensus Estimate for Transit Packaging segment’s revenues is at $514 million, suggesting a decline of 13% from the year-ago quarter. The segment is expected to report an operating profit of $68 million, a projected decline of 5% from the year-ago quarter.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Crown Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for Crown Holdings is +4.26%.

Zacks Rank: Crown Holdings currently carries a Zacks Rank #4 (Sell).

Price Performance

 


In a year’s time, shares of Crown Holdings have gained 9.6%, compared with the industry’s growth of 6.3%.

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.

AGCO Corporation AGCO has an Earnings ESP of +449.90% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

TriMas Corporation TRS has an Earnings ESP of +14.29% and a Zacks Rank #1.

IIVI Incorporated IIVI has an Earnings ESP of +5.53% and a Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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