Ball Corp (BLL) Q1 Earnings & Sales Top Estimates, Up Y/Y
Ball Corporation BLL reported first-quarter 2021 adjusted earnings of 72 cents per share, beating the Zacks Consensus Estimate of 67 cents. The bottom line also improved 18% on a year-over-year basis. The quarterly results reflect solid global beverage-can volume growth.
On a reported basis, the company posted earnings of 60 cents per share compared with the prior-year quarter’s 7 cents.
Total sales were $3,125 million in the reported quarter, up 12% from the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $3,088 million. Global beverage-can volumes were up 8% 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 amounted to $2,493 million in first-quarter 2021, up 12.6% from the year-ago quarter. Gross profit totaled $632 million compared with the year-ago quarter’s $570 million. Gross margin came in at 20.2% during the reported quarter, reflecting a 30 basis point contraction year over year.
Selling, general and administrative expenses surged 20% year over year to $157 million. Adjusted operating profit improved 12% year over year to $345 million. Adjusted operating margin came in at 11.0%, flat compared with the prior-year quarter.
Segment Performance
The Beverage packaging North and Central America segment revenues increased to $1,296 million during first-quarter 2021 from the year-ago quarter’s $1,181 million. Operating earnings came amounted to $140 million during the reported quarter, down 4% year over year.
Sales at the Beverage packaging, EMEA segment were $796 million in the first quarter, up 19% year over year. Operating earnings increased 47% year over year to $100 million.
The Beverage packaging South America segment’s revenues increased to $487 million in the reported quarter from the prior-year period’s $405 million. Operating earnings climbed 48% to $93 million from the year-earlier quarter’s $63 million.
In the Aerospace segment, sales were down 1.9% year over year to $424 million. Operating earnings decreased to $35 million from the year-ago quarter figure of $40 million. At the end of the quarter under review, the segment’s contracted backlog was $2.2 billion. Contracts already won but not yet booked into current contracted backlog was $5.3 billion.
Financial Condition
The company reported cash and cash equivalents of $461 million at the end of first-quarter 2021, down from $801 million at the end of the 2020. Cash flow used in operating activities was $477 million in the reported quarter compared with $708 million in the prior-year quarter. The company’s long-term debt declined to $6.9 billion at the end of the first quarter of 2021 from $7.5 billion at the end of 2020.
Outlook
Global demand for aluminum packaging continues to grow as customers are now preferring cans over glass and plastic. The company continues to expect long-term diluted earnings per share growth goal of at least 10-15%.
Share Price Performance
Ball Corp's shares have gained 41% over the past year compared with the industry’s rally of 48.8%.
Zacks Rank and Stocks to Consider
Ball Corp currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector are AGCO Corporation AGCO, Avery Dennison Corporation AVY and Caterpillar Inc. CAT. All of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AGCO Corporation has an estimated earnings growth rate of 51.2% for the ongoing year. The company’s shares have rallied 208% in the past year.
Avery Dennison has an expected earnings growth rate of 19% for 2021. Over the past year, the stock has climbed 107%.
Caterpillar has an estimated earnings growth rate of 44.2% for the ongoing year. The company’s shares have soared 122% in the past year.
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