Yahoo Finance Ball Corp's (BLL) Q1 Earnings Beat, Sales Lag Estimates
Ball Corporation BLL reported first-quarter 2020 adjusted earnings of 61 cents per share, beating the Zacks Consensus Estimate of 60 cents. The bottom line also improved 24% on a year-over-year basis.
On a reported basis, the company posted earnings of 7 cents per share compared with 34 cents in the prior-year quarter.
Total sales came in at $2,785 million in the reported quarter, flat compared with the year-ago quarter. The top line missed the Zacks Consensus Estimate of $2,842 million. However, global beverage can volumes were up 4% in the quarter.
Ball Corporation Price, Consensus and EPS Surprise
Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote
Operational Update
Cost of sales came in at $2,215 million in first-quarter 2020, down 2% from the year-ago quarter. Gross profit was at $570 million in the first quarter compared with $532 million in the year-ago quarter. Gross margin came in at 20.5% during the reported quarter compared with the prior-year quarter figure of 19.1%.
Selling, general and administrative expenses rose 3% year over year to $131 million. Adjusted operating income increased 12% to $307 million from the year-ago quarter figure of $275 million. The company reported operating margin of 11.0% compared with 9.9% in the prior-year comparable period.
Segment Performance
The Beverage packaging’s North and Central America segment revenues increased to $1,181 million in first-quarter 2020 from $1,131 million a year ago. Operating earnings surged 24% year over year to $146 million.
Sales at the Beverage packaging, Europe segment came in at $669 million in the reported quarter, declining 2% year over year. Operating earnings decreased 8% year over year to $687 million.
The Beverage packaging South America segment’s revenues declined to $405 million in first-quarter 2020 from $441 million in the prior-year comparable period. Operating earnings fell to $63 million from $68 million in the year-earlier quarter.
In the Aerospace segment, sales rose 32% year over year to $432 million. Operating earnings increased to $40 million from year-ago quarter figure of $30 million. As of the end of first-quarter 2020, the segment’s contracted backlog was at $2.3 billion.
Financial Condition
Ball Corp reported cash and cash equivalents of $801 million at the end of first-quarter 2020, up from $603 million at the end of the prior-year quarter. Cash used in operating activities were $708 million during the reported quarter, compared with $129 million in the year-ago quarter. The company’s long-term debt increased to $7.5 billion as of Mar 31, 2020, from $6.7 billion as of Dec 31, 2019.
Outlook
In the wake of the coronavirus pandemic, Ball Corporation has taken actions to focus on cash and liquidity, while continuing to pay dividends and execute growth investments. The company expects to generate free cash flow in the range of $500 million in 2020.
Share Price Performance
Ball Corp’s shares have appreciated 6.1% over the past year, outperforming the industry’s growth of 4.6%.
Zacks Rank and Stocks to Consider
Ball Corp currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Ampco-Pittsburgh Corporation AP, Silgan Holdings Inc. SLGN and Energous Corporation WATT. While Ampco-Pittsburgh and Silgan Holdings sport a Zacks Rank #1 (Strong Buy), Energous Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ampco-Pittsburgh has an expected earnings growth rate of 2.70% for the current year. The stock has appreciated 8.5% in the past three months.
Silgan has a projected earnings growth rate of 11.3% for 2020. The company’s shares have gained 5% over the past year.
Energous has an estimated earnings growth rate of 17.3% for the ongoing year. The company’s shares have gained 22% in the past year.
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