Ball Corp (BALL) Q4 Earnings Beat, Sales Miss Estimates
Ball Corporation BALL has reported fourth-quarter 2023 adjusted earnings of 78 cents per share, beating the Zacks Consensus Estimate of 77 cents. The bottom line increased 77% year over year.
On a reported basis, the company earnings per share were 49 cents compared with the prior-year quarter’s 17 cents.
Total sales were $3.40 billion in the reported quarter, down 4.1% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.52 million. Global beverage can shipments were down 3.2%, excluding the impacts of the 2022 Russia business divestment.
Ball Corporation Price, Consensus and EPS Surprise
Ball Corporation price-consensus-eps-surprise-chart | Ball Corporation Quote
Operational Update
The cost of sales was $2.70 billion in fourth-quarter 2023, down 10.8% from the year-ago quarter. The gross profit totaled $699 million, up from the year-ago quarter’s $518 million. The gross margin was 20.5%, up from the prior-year quarter’s 14.6%.
Selling, general and administrative expenses rose 8.3% year over year to $130 million. Adjusted operating profit was $300 million compared with the prior-year quarter’s $188 million. The adjusted operating margin was 8.8% compared with 5.3% in the year-ago quarter.
Segmental Performances
The Beverage packaging, North and Central America segment’s revenues decreased 8.7% year over year to $1.38 billion in the fourth quarter. Results have reflected lower shipments and the contractual pass-through of lower aluminum costs, favorably offset by incremental inflation recovery. We predicted sales of $1.53 billion.
Operating earnings amounted to $156 million, up 57.6% year over year. Our estimate for the segment's operating earnings was $167 million. We had expected the segment’s volume to rise 5.4% in the quarter.
Sales at the Beverage packaging, EMEA segment were $739 million in the quarter, down 1.2% year over year. The decline was due to lower shipments from the sale of the Russia operations in the third quarter of 2022 and the contractual pass-through of lower aluminum costs. The reported figure surpassed our estimated sales of $634 million.
Operating earnings were $80 million, which marked a 70.2% year-over-year improvement. We had projected operating earnings of $104 million. Volume was expected to be down 6.2% for this segment.
The Beverage packaging, South America segment’s revenues were $616 million in the reported quarter, up 0.3% year over year. The segment witnessed improvements in volume levels but was offset by the contractual pass-through of lower aluminum costs and an unfavorable regional product mix. Our projection for the segment’s sales was $681 million.
Operating earnings improved 60% to $125 million. The reported figure surpassed our estimate of $74.8 million. Our model had predicted a volume increase of 15.2% for the segment.
The Aerospace segment’s sales were down 1.2% year over year to $500 million. We projected sales of $496 million for the segment. Operating earnings increased 34.1% year over year to $59 million. Our estimate for its operating earnings was $106 million.
At the end of 2023, the segment’s contracted backlog was $2.98 billion. Contracts already won but not yet booked into the current contracted backlog were $5.9 billion.
Financial Condition
The company reported cash and cash equivalents of $695 million at the end of 2023, up from $548 million at the end of the prior year. Cash provided by operating activities amounted to $1.86 billion in 2023, a substantial improvement from $0.3 billion reported last year.
The company’s long-term debt decreased to $7.50 billion at the end of 2023, from $7.54 billion at the end of 2022.
2023 Performance
Ball Corp has reported 2023 adjusted earnings of $2.90 per share, in line with the Zacks Consensus Estimate. The bottom line increased 4% year over year.
On a reported basis, the company’s earnings per share were $2.23 compared with the prior year’s $2.25.
Total sales were $14.03 billion in 2023, down 8.6% from the prior year. The same missed the Zacks Consensus Estimate of $14.15 billion. Global beverage can shipments were down 3.3%, excluding the impacts of the 2022 Russia business divestment.
Price Performance
The company’s shares have lost 3.7% over the past year compared with the industry’s decline of 3%.
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Zacks Rank and Stocks to Consider
Ball Corp currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are AZZ Inc. AZZ, Applied Industrial Technologies AIT and A. O. Smith Corporation AOS. AZZ currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2024 earnings is pegged at $4.03 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 6.8%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 16% in the past year.
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