Crown Holdings Inc. (CCK) reported third-quarter adjusted earnings per share (EPS) of $1.00, down 1% from $1.01 in the year-ago quarter. Reported EPS was in line with the Zacks Consensus Estimate and at the mid point of the company’s guided range of 95 cents to $1.05.
Including restructuring charges, gains on asset sale and income tax benefit recorded in the third quarter, EPS stood at $2.20. Including restructuring charges and gains on asset sale and an income tax charge, EPS in the prior-year quarter was 84 cents.
Total revenue declined 5% on a year-over-year basis to $2.3 billion in the quarter, due to unfavorable currency translation, but was in line with the Zacks Consensus Estimate. Global beverage can volumes were up 5% in the quarter.
Costs and Margins
Cost of sales improved 5% to $1.89 billion in the reported quarter. Gross profit dipped 7% to $369 million in the quarter from $396 million in the prior-year quarter, reflecting $16 million in unfavorable foreign currency translation. Gross margin contracted 30 basis points year over year to 16%.
Selling, engineering and administration expenses also improved to $92 million in the quarter from $96 million in the prior-year quarter. Adjusted operating income declined 8% to $277 million from $300 million in the year-ago quarter. Operating margins contracted 40 basis points to 12% in the quarter.
As of September 30, 2012, cash and cash equivalents amounted to $240 million compared with $230 million as of June 30, 2012. Receivables increased to $1.4 billion as of September 30, 2012 compared with $1.2 billion as of June 30, 2012. Long-term debt increased to $3.6 billion as of September 30, 2012 from $3.5 billion as of June 30, 2012.
Cash flow from operating activities was a usage of $117 million in the first nine months ended September 30, 2012 compared with usage of $134 in the prior-year comparable period.
The company has entered into an agreement to purchase shares of its common stock under an accelerated share repurchase program. Under the program, as of August 14, 2012, 5,016,190 shares were initially purchased for $200 million.
Philadelphia, Pennsylvania-based Crown Holdings engages in the design, manufacture, and sale of packaging products for consumer marketing companies worldwide. The company’s products include aluminum beverage cans and ends, and other packaging products to beverage and beer companies; food cans and ends, aerosol cans and ends as well as steel containers for food products.
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It competes with Ball Corporation
), Rexam plc
) and Silgan Holdings Inc.
). The company currently retains a Zacks #3 Rank (short-term Hold recommendation).
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