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Crown Holdings (CCK) Earnings and Sales Miss Estimates in Q3

Crown Holdings, Inc. CCK reported third-quarter 2022 adjusted earnings per share (EPS) of $1.46, missing the Zacks Consensus Estimate of $1.76. The bottom line slumped 28% year over year and also fell short of the company’s guidance of $1.75-$1.85.

Including one-time items, the company reported earnings from continuing operations of $1.06 per share in the quarter under review compared with $1.44 per share in the prior-year quarter.

Net sales in the quarter totaled $3,259 million, up 11.6% from the year-ago quarter’s $2,920 million. The top line benefited from increased beverage can unit volumes and pass-through of higher material costs.  Unfavorable foreign currency translation had a negative impact of $127 million. The reported figure missed the Zacks Consensus Estimate of $3,350 million.

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. Price and EPS Surprise
Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. price-eps-surprise | Crown Holdings, Inc. Quote

Cost and Margins

The cost of products sold increased 17% year over year to $2,726 million. On a year-over-year comparison, gross profit declined 11% to $533 million. Gross margin contracted to 16.4% from the year-ago quarter’s 20.5%.
Selling and administrative expenses were down 18% year over year to $122 million. Segment operating income came in at $336 million during the quarter under review compared with the prior-year quarter’s $379 million. The decline was mainly due to elevated energy prices, costs associated with higher inventory levels and unfavorable foreign currency translation of $8 million. The segment operating margin came in at 10.3% compared with 13% in the prior-year quarter.

Segment Performance

Net sales in the Americas Beverage segment totaled $1,312 million, up 14% year over year. Segment operating profit decreased 2.6% year over year to $185 million.

The European Beverage segment’s sales gained 7.6% year over year to $552 million. Operating income came in at $20 million, marking a 74% slump from the year-ago quarter’s $76 million.

The Asia-Pacific segment’s revenues totaled $375 million, surging 34% year over year. Operating profit was $35 million compared with the prior-year quarter’s $32 million.

Revenues in the Transit Packaging segment totaled $609 million, down 5% from the year-ago quarter’s $644 million. Operating profit declined 9.6% year over year to $75 million.

Financial Update

Crown Holdings had cash and cash equivalents of $368 million at the end of third-quarter 2022, substantially down from $2,261 million at the end of the prior-year quarter. The company generated $134 million in cash from operating activities in the first nine-month period of 2022 compared with $245 million in the prior-year period.

Crown Holdings’ long-term debt rose to $6,709 million at the end of the third quarter, from $6,034 million at the prior-year quarter’s end.

So far in the year, CCK has repurchased 6.4 million of its shares for $722 million. The company has remaining authorization to repurchase an additional $2.3 billion through December 2024.


Crown Holdings projects fourth-quarter 2022 adjusted EPS between $1.00 and $1.10. For the current year, the company anticipates adjusted EPS in the band of $6.60-$6.70.

Beverage can demand growth remains strong and the company is expected to benefit from this trend. Crown Holdings continues to implement several beverage can capacity-expansion projects to meet the surging demand. The company is focused on constructing new plants and adding production lines to its existing facilities. However, CCK expects input costs to remain inflated for the remaining part of 2022 and will likely continue to impact margins.

Price Performance

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Crown Holdings’ shares have declined 30.1% in the past year compared with the industry’s fall of 36%.

Zacks Rank and Stocks to Consider

Crown Holdings currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Industrial Products sector are Tenaris TS, Enerpac Tool Group Corp. EPAC and Reliance Steel & Aluminum Co. RS. While TS and EPAC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.

Tenaris delivered a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for the company for 2022 indicates year-over-year growth of around 120%. The estimate has moved up 3% in the past 60 days. The TS stock has risen 28% in the past year.

Enerpac Tool delivered a four-quarter earnings surprise of 3.4%, on average. EPAC’s earnings estimates have increased 9% for fiscal 2023 (ending August 2023) in the past 60 days. The estimate indicates year-over-year growth of 44.6%. EPAC’s shares have gained 27.1% in the past year.

Reliance Steel & Aluminum’s earnings surprise in the last four quarters was 13.4%, on average. It has an expected earnings growth rate of 27.9% for fiscal 2022. The earnings estimates have moved up 0.1% over the past 60 days. The RS stock has gained 26% in the past year.

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