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Crown Holdings (CCK) to Report Q3 Earnings: What's in Store?

Crown Holdings, Inc. CCK is scheduled to report third-quarter 2020 results on Oct 19, after the closing bell.

The company reported declines in both earnings and revenues in second-quarter 2020 owing to the impact of the coronavirus pandemic, the pass through of lower material costs and an unfavorable impact of foreign currency translation. While earnings beat the Zacks Consensus Estimate, revenues lagged the same.

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. Price and EPS Surprise

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

Q3 Estimates

The Zacks Consensus Estimate for third-quarter total sales is pegged at $3.06 billion, indicating a decline of 0.7% from the year-ago quarter. The consensus mark for earnings currently stands at $1.60, suggesting growth of 2.6% from the prior-year reported figure. The estimate has been revised downward by 1% over the past 30 days.

The company has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters, while missing once. It has a trailing four-quarter earnings surprise of 7.97%, on average.

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 might have benefited the company’s third-quarter performance 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. Consequently, the company has been witnessing strong beverage can demand across its markets. This, in turn, is likely to get reflected in the to-be-reported quarter’s top line. However, these gains are likely have been negated somewhat by the impact of the weakness in its industrial end- markets. Nevertheless, its ongoing cost-control measures are likely to have contributed to the third-quarter performance.

Q3 Segment Expectations

In North America, the company has been witnessing strong beverage demand as consumers now prefer cans over other packaging formats. The third quarter was not an exception to this trend. The Zacks Consensus Estimate for the Americas Beverage segment’s revenues is pegged at $868 million, indicating growth of 4% from the prior-year quarter. The segment is expected to report an operating profit of $148 million, up from $134 million in the year-earlier quarter.

The European Beverage segment’s third-quarter results are likely to reflect the ongoing strong demand for beverage cans. The Zacks Consensus Estimate for the segment’s revenues is currently pegged at $434 million compared with the $416 million in the year-ago period. The segment is projected to report an operating profit of $67 million, suggesting growth of 5% from the prior-year quarter.

The Zacks Consensus Estimate for the European Food segment’s revenues currently stands at $620 million compared with the year-earlier quarter’s $581 million. The segment continued to witness higher demand owing to solid third-quarter crop yields. The consensus mark for the segment’s operating profit for third-quarter 2020 is currently pegged at $86 million, indicating an improvement of 9% from $79 million in year-ago quarter.

The Asia-Pacific segment is anticipated to generate revenues of $305 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 $41 million, which suggests a decline of 13% from the prior-year quarter’s $47 million.

The Transit Packaging segment supplies a wide array of industrial markets, which have been affected by a decline in global manufacturing activity amid the pandemic. The Zacks Consensus Estimate for Transit Packaging segment’s revenues is pegged at $486 million, suggesting a decline of 14% from the year-ago quarter. The segment is expected to report an operating profit of $55 million, suggesting a plunge of 26% from the year-ago quarter.

What Does Our Model Say?

Our proven model conclusively predicts 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.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Crown Holdings has an Earnings ESP of +2.06%.

Zacks Rank: The company currently has a Zacks Rank #3.

Price Performance

In a year’s time, shares of Crown Holdings have gained 28.9%, compared with the industry’s rally of 26.0%.

Other Stocks to Consider

Here are some other Industrial Product stocks, which you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

AGCO Corporation AGCO has an Earnings ESP of +6.07% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lindsay Corporation LNN, currently a Zacks #2 Ranked stock, has an Earnings ESP of +11.01%.

Avery Dennison Corporation AVY has a Zacks Rank #3 and an Earnings ESP of +1.94%, at present.

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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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