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What's in the Offing for Crown Holdings' (CCK) Q2 Earnings?

Zacks Equity Research

Crown Holdings, Inc. CCK is scheduled to report second-quarter 2019 results, after the closing bell on Jul 17.

The company is poised to gain from solid global beverage-can demand as well as its focus on acquisitions and cost-control measures. However, the company’s performance will likely be marred by currency fluctuations and inflated raw material costs in the to-be-reported quarter.

Let’s see how things are shaping up prior to this announcement.

Key Factors

Positive impact of the Signode acquisition and strong beverage can demand will drive revenues in the second quarter. Crown Holding’s focus on pricing and cost-control initiatives will likely stoke growth. However, the Americas Beverage, European Beverage and European Food segments results are likely to be hurt by currency fluctuations in the quarter.

The Zacks Consensus Estimate for sales for the to-be-reported quarter is projected at $3.03 billion, marginally down from the year-ago quarter’s $3.04 billion.

Crown Holdings projects adjusted earnings per share for the second quarter between $1.43 and $1.53 compared with $1.55 recorded in the prior-year quarter. Raw-material inflation and higher interest expenses might depress margins.

The Zacks Consensus Estimate for second-quarter 2019 earnings is currently pegged at $1.50, calling for a year-over-year decline of 3.2%.

The Zacks Consensus Estimate for the Americas Beverage segment’s revenues is $874 million, a projected increase of 3% from the prior-year quarter’s $848 million. The segment is expected to report an operating profit of $128 million, up from $113 million witnessed in the year-earlier quarter.

The European Beverage is estimated to record revenues of $401 million compared to the $405 million generated in the year-ago period. The segment is projected to report an operating profit of $57 million, down from $59 million recorded in the comparable period last year.

The Zacks Consensus Estimate for the European Food segment’s revenues is currently pegged at $489 million compared with the year-earlier quarter’s $514 million. This segment is expected to report an operating profit of $78 million, down 8.2% from $85 million witnessed in year-ago quarter.

The Asia-Pacific segment is anticipated to generate revenues of $330 million, slightly down from the $332 million reported in the prior-year quarter. The segment is likely to report an operating profit of $46 million, down from the prior-year quarter’s $47 million.

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. Price and EPS Surprise

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

Earnings Whispers

Our proven model does not conclusively show that Crown Holdings is likely to beat on earnings in the to-be-reported quarter as it lacks 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:

Zacks ESP: The Earnings ESP for Crown Holdings is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $1.50 currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Crown Holdings currently carries a Zacks Rank #3, which increases the predictive power of ESP. But we also need to have a positive earnings ESP to be sure of an earnings beat.

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 negative estimate revisions.

Stocks to Consider

Here are a few Industrial Products stocks which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:

Roper Technologies, Inc. ROP has an Earnings ESP of +0.49% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Terex Corporation TEX has an Earnings ESP of +1.58% and carries a Zacks Rank #3.

AptarGroup, Inc. ATR, another Zacks #3 Ranked stock, has an Earnings ESP of +0.56%.

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