Crown Holdings (CCK) Q3 Earnings In Line, Revenues Beat
Crown Holdings Inc. CCK delivered third-quarter 2017 adjusted earnings per share of $1.41, which came in line with the Zacks Consensus Estimate and delivered an improvement of 6% on a year-over year basis. Earnings came within management’s guidance of $1.35-$1.45.
On a reported basis, earnings came in at $1.32 per share, up 1% from $1.31 in the prior-year quarter.
Net sales in the quarter rose 6% year over year to $2,468 million. Revenues beat the Zacks Consensus Estimate of $2,411 million. This can be attributed to improved global beverage can volumes, food and aerosol can volumes, and the pass through of higher material costs to customers. It was also aided by favorable impact of currency translation.
Crown Holdings, Inc. Price, Consensus and EPS Surprise
Crown Holdings, Inc. Price, Consensus and EPS Surprise | Crown Holdings, Inc. Quote
Cost of products sold increased 6.4% year over year to $1,956 million. On a year-over-year basis, gross profit improved 5% to $512 million, while gross margin contracted 30 basis points (bps) to 20.7% in the quarter.
Selling and administrative expenses remained flat at $90 million. Adjusted segment operating income increased 7% year over year to $359 million in the quarter. Operating margin improved 10 bps to 14.5% from 14.4% in the year-ago quarter.
Segment Performance
Net sales from the Americas Beverage segment were $763 million, up 1.5% from $752 million in the year-ago quarter. Segment operating profit inched up 1% to $131 million from $130 million in the year-ago quarter.
The North-America Food segment’s sales increased 0.5% year over year to $194 million. Operating earnings remained flat year over year at $23 million.
The European Beverage segment’s sales increased 2% year over year to $428 million. Operating income rose 1% year over year to $78 million.
Revenues in the European Food segment were up 3% year over year to $639 million. Segment operating profit went up 2% to $96 million from $94 million in the year-ago quarter.
Revenues in the Asia-Pacific segment remained flat at $300 million. Operating profit also remained flat at $40 million in the reported quarter.
Financial Update
Crown Holdings had cash and cash equivalents of $374 million at the end of the third quarter compared with $526 million at the end of the prior-year quarter. Cash flow from operations was $489 million in the nine-month period ended Sep 30, 2017 compared with $490 million in the prior-year comparable period.
Adjusted free cash flow was $206 million in the nine-month period ended Sep 30, 2017 compared with $154 million in the prior-year comparable period. As of the quarter end, Crown Holdings’ total debt increased to $5.1 billion compared with $5.0 billion as of the prior-year quarter end.
The company repurchased 6.2 million of shares for $339 million so far in fiscal 2017.
Outlook
The company currently expects 2017 adjusted diluted earnings per share to be in the range of $3.98-$4.03. Adjusted diluted earnings per share for the fourth quarter are projected in the range of 75-80 cents.
In the past year, Crown Holdings has outperformed the industry it belongs to. Its shares increased 10.8%, while the industry gained 8.1%.
Zacks Rank & Key Picks
Crown Holdings currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industrial product space include Barnes Group Inc. B, TPI Composites, Inc. TPIC and Sun Hydraulics Corporation SNHY . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barnes Group has delivered an average earnings surprise of 11.6% in the trailing four quarters.
TPI Composites has delivered an average earnings surprise of 351.7% in the trailing four quarters.
Sun Hydraulics has delivered an average earnings surprise of 3.5% in the trailing four quarters.
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