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Ball Corp (BLL) Set to Report Q3 Earnings: What to Expect?

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Ball Corporation BLL is scheduled to report third-quarter 2020 results on Nov 5, before the opening bell.

Q2 Performance

Ball Corp reported a year-over-year improvement in earnings despite a drop in revenues. While the earnings figure beat the Zacks Consensus Estimate, revenues missed the same.

The company beat estimates in three of the trailing four quarters, while missing the same once. It has a trailing four-quarter earnings surprise of 4%, on average.

Ball Corporation Price and EPS Surprise

Ball Corporation Price and EPS Surprise
Ball Corporation Price and EPS Surprise

Ball Corporation price-eps-surprise | Ball Corporation Quote

Q3 Estimates

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at 77 cents, suggesting growth of 10% from the prior-year quarter. The Zacks Consensus Estimate for total sales stands at $2.98 billion, indicates an improvement of of 1% from the year-ago reported figure.

Price Performance

Shares of Ball Corp have gained 33.7% in the past three months, compared with the industry's rally of 27.2%.

Factors to Note

Ball Corp provides key aluminum packaging products and services to consumer-oriented end-markets, such as food and beverages, household and healthcare. Demand has remained robust amid the pandemic. Moreover, the company continues to benefit from robust global beverage-can demand as consumers now prefer cans over glass and plastic. These factors might have contributed to the company’s third-quarter results. The company has been focused on pursuing cost-out programs, completing growth capital projects and banking on the inherent sustainability attributes of metal packaging. These initiatives are likley to have driven the company’s margin during the third quarter.

The Beverage packaging, North and Central America segment is projected to generate sales of $1,277 million in the third quarter, suggesting a 4% year-over-year increase. Segment operating income is projected at $186 million, indicating year-over-year improvement of 18%. Operational efficiency, new customer contracts and solid demand for aluminum beverage packaging are likely to have benefited the segment during the quarter to be reported. However, the segment has been battling short-term costs owing to tight inventories.

The Zacks Consensus Estimate for the Beverage packaging, South America segment’s net sales is pegged at $367 million, suggesting a year-over-year decline of 6%. The segment’s operating income stands at $62 million, indicating year-over-year increase of 3%.

The Zacks Consensus Estimate for the Beverage packaging, Europe segment’s sales is pegged at $770 million for the to-be-reported quarter, suggesting growth of 10% from the prio-year quarter. The segment operating income is projected at $90 million, indicating an improvement of 9% year over year. Customers’ growing preferences for cans, and investment in incremental capacity in the company’s existing facilities are anticipated to have contributed to the segment’s performance during the quarter under review.

The Aerospace segment’s contracted backlog remains strong at $2.1 billion as of second-quarter 2020 end. The Zacks Consensus Estimate for the Aerospace segment's revenues is pegged at $430 million for the quarter under review, indicating year-over-year improvement of about 15%. The segment’s operating income is projected at $41.4 million, suggesting year-over-year growth of 18%. A robust aerospace backlog is likely to have driven the segment’s third-quarter performance.

The company might have incurred higher-than-expected start-up costs due to the ongoing capacity expansion efforts to meet growing demand for cans. Further, incremental costs related to the COVID-19 pandemic may have dampened near-term price/mix. These factors may have impacted margins in the quarter to be reported.

What Our Quantitative Model Suggests

Our proven model does not conclusively predict an earnings beat for Ball Corp this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ball Corp has an Earnings ESP of -1.44%.

Zacks Rank: Currently, the company carries a Zacks Rank #3.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

AGCO Corporation AGCO has an Earnings ESP of +6.07% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flowserve Corporation FLS, currently a Zacks #2 Ranked stock, has an Earnings ESP of +2.56%.

ParkerHannifin Corporation PH has a Zacks Rank #2 and an Earnings ESP of +5.44%, at present.

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