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Crown Holdings (CCK) Q1 Earnings & Sales Beat Estimates, Up Y/Y

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·5 min read
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Crown Holdings, Inc. CCK reported first-quarter 2021 adjusted earnings per share of $1.83, outpacing the Zacks Consensus Estimate of $1.39. The bottom-line figure also jumped 62% year over year.

Including one-time items, earnings per share surged 142% year on year to $1.57 during the reported quarter.

Net sales in the quarter came in at $3,078 million, up from the year-ago quarter’s $2,757 million. The top line increased on improved sales unit volumes across all segments and favorable currency translation. The reported figure also beat the Zacks Consensus Estimate of $3,001 million.

Cost and Margins

Cost of products sold was up 8.2% year over year to $2,401 million. On a year-over-year basis, gross profit climbed 26% to $677 million. Gross margin expanded to 21.9% from the year-ago quarter’s 19.4%.

Selling and administrative expenses inched up 1.2% year over year to $164 million. Segment operating income increased 45.3% year over year to $433 million during the March-end quarter. Operating margin came in at 14% compared with the 11% recorded in the prior-year quarter.

Crown Holdings, Inc. Price, Consensus and EPS Surprise

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

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

Segment Performance

Net sales in the Americas Beverage segment came in at $993 million, up 14% year over year. Segment operating profit jumped 40.2% year over year to $188 million.

The European Beverage segment’s sales were up 12.4% year over year to $389 million. Operating income came in at $62 million, up 59% year on year.

Revenues in the European Food segment climbed 14.4% year over year to $460 million. Segment operating profit soared 91% year over year to $63 million.

The Asia-Pacific segment’s revenues improved 9.9% year over year to $331 million. Operating profit were up 15.6% year over year to $52 million.

Revenues in the Transit Packaging segment totaled $557 million compared with the year-ago quarter’s $522 million. Operating profit was up 6% year over year to $70 million.

Financial Update

Crown Holdings had cash and cash equivalents of $588 million at the end of first-quarter 2021 compared with $765 million at the end of year-ago quarter. The company utilized $385 million cash in operating activities in the March-end quarter compared with the year-earlier period’s $607 million.

Crown Holdings’ long-term debt decreased to $7,875 million as of Mar 31, 2021 from $8,631 million as of Mar 31, 2020.

Outlook

Crown Holdings projects second-quarter 2021 adjusted earnings per share between $1.70 and $1.80. For the ongoing year, the company anticipates adjusted earnings per share in the range of $6.60 to $6.80.

On Apr 8, Crown Holdings entered into an agreement to divest its European Tinplate business to KPS Capital Partners, LP for €1.9 billion ($2.3 billion), while retaining 20% shareholding interest in the business. Crown Holdings expects to utilize net proceeds of the deal in reducing debt, funding capital projects as well as making share repurchases. The Tinplate business consists of 44 manufacturing plants across 17 countries in Europe, the Middle East and Africa (EMEA). This business will be reported as discontinued operations beginning with the second-quarter results.

Crown Holdings continues to implement several numbers of beverage-can capacity-expansion projects in a bid to meet the surging beverage-can demand, which account for around 75% of the company’s operational income. It is focused on the construction of new plants and the addition of production lines to its existing facilities. The company will commercialize approximately 6 billion units of annual capacity in this year.

Price Performance

Crown Holdings’ shares have appreciated 82.8% over the past year compared with the industry’s growth of 49.3%.


Zacks Rank and Other Stocks to Consider

Crown Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Industrial Products sector are Deere & Co. DE, ACCO Brands Corporation ACCO and Astec Industries, Inc. ASTE, each sporting a Zacks Rank of 1, at present.

Deere has a projected earnings growth rate of 82.5% for fiscal 2021. Over the past year, the company’s shares have soared 133.2%.

ACCO Brands has an estimated earnings growth rate of 62.8% for the ongoing year. The company’s shares have gained 57.7% in the past year.

Astec has an expected earnings growth rate of 14.3% for 2021. The stock has surged 111.9% in a year’s time.

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