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Ball Corp (BLL) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

Ball Corporation BLL is scheduled to report second-quarter 2019 results on Aug 1, before the opening bell.

The Zacks Consensus Estimates for Ball Corporation’s earnings per share is pegged at 65 cents for the June-end quarter, up 12% year over year. The Zacks Consensus Estimate for total sales of $3.03 billion for the quarter indicates a decline of 2.3% from the prior-year quarter.
 
Let’s see how things are shaping up for this announcement.

Factors at Play

Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. The company focuses on pursuing cost-out programs, completing growth capital projects and commercializing on the inherent sustainability attributes of metal packaging. These efforts will help expand the company’s margin in the to-be-reported quarter. Further, it is initiating additional products to expand the company’s aerospace infrastructure and testing capabilities.

Further, Ball Corporation is poised to gain from strong demand for aluminum packaging and robust aerospace backlog. The company anticipates to benefit from outstanding requests for bids and proposals, and contract wins. It has approximately $5.3 billion as contracts already won, but not booked into the last reported quarter’s backlog which will drive growth.

The Zacks Consensus Estimate for net sales for the Beverage packaging, South America segment is pegged at $397 million, depicting a year-over-year increase of 4.7%. The segment’s operating income indicates a decline of 4.5% year over year to $63 million. The South American industry trends remain impressive, with cans being the favored package in the beer, tea, energy and hard alcohol categories. Furthermore, the segment’s geographical expansions will fuel growth in the second quarter.
 
The Zacks Consensus Estimate for sales in the Beverage packaging, Europe segment is pinned at $710 million for the second quarter, up 0.9% year over year. Segment operating income is projected at $89 million, calling for an improvement of 18.7% year over year.

The Zacks Consensus Estimate for the Aerospace segment's revenues is pinned at $327 million for the quarter under review, reflecting year-over-year increase of about 12.7%. The segment’s operating income is projected at $32 million, indicating year-over-year growth of 33.3%. The company expects its aerospace business to register earnings growth in the second quarter owing to strong backlog levels.

The Beverage packaging North and Central America segment will likely report sales of $1,360 million, up 9.6% year over year. Segment operating income is projected at $165 million, indicating year-over-year improvement of 5%. The company’s North American segment is anticipated to benefit from fixed cost savings associated with the North American optimization program, volume growth and reduce start-up costs for the current year and beyond.

Nonetheless, headwinds related to currency, higher freight rates and tight metal supply in the United States will likely affect Ball Corporation’s performance. Moreover, the company's performance will be marred by volatile volumes in the EMEA beverage can business due to governmental regulation. Additionally, Saudi Arabia continues to be a challenge for Ball Corporation.

Ball Corporation Price and EPS Surprise

Ball Corporation Price and EPS Surprise

Ball Corporation price-eps-surprise | Ball Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that Ball Corporation is likely to beat on earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. This is not the case here as you will see below:

Earnings ESP: The Earnings ESP for Ball Corporation is -1.55%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate for the second-quarter earnings are currently pegged at 64 cents and 65 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ball Corporation currently carries a Zacks Rank of #3.
     
It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Price Performance

Ball Corporation’s shares have gained 87.1% over the past year, outperforming the industry’s growth of 58.1%.



Stocks to Consider

Here are a few companies that you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:

Axon Enterprise, Inc AAXN has an Earnings ESP of +10.21% and carries a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Sealed Air Corporation SEE has an Earnings ESP of +1.34% and carries a Zacks Rank of 2, at present.

AptarGroup, Inc. ATR, another Zacks #2 Ranked stock, has an Earnings ESP of +0.56%.

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