Ball Corporation (BLL) Q2: Tops Earnings, View Positive
Zacks Investment Research | Aug 04, 2016 03:31AM ET
Ball Corporation (NYSE:BLL) reported second-quarter 2016 adjusted earnings of $1.05 per share, surpassing the Zacks Consensus Estimate of 99 cents. Earnings also increased around 18% on a year-over-year basis, driven by the completion of legacy metal packaging growth projects, a robust aerospace backlog and the recent Rexam acquisition.
On a reported basis, the company posted earnings of $2.54 per share, compared to $1.13 per share in the prior-year quarter.
Operational Update
Total revenue declined 6.5% year over year to $2.03 billion in the reported quarter. Revenues also lagged the Zacks Consensus Estimate of $2.15 billion.
Cost of sales decreased roughly 10% year over year to $1.6 billion. Gross profit rose 9.3% year over year to $434 million. Gross margin expanded 310 basis points (bps) to 21.4%.
Selling, general and administrative expenses dropped 11% year over year to $105 million. Adjusted operating income jumped 20.7% to $251 million from $208 million in the year-ago quarter. The company reported operating margin of 12.4%, increased 280 bps year over year.
Segment Performance
The Metal Beverage Packaging, Americas & Asia segment’s revenues remained flat year over year to $1.1 billion in the reported quarter. Operating earnings of $137 million went up 8.7% year over year.
Sales at the Metal Beverage Packaging, Europe segment were $479 million in the reported quarter, down 0.4% year over year. Operating earnings surged 25.4% year over year to $74 million, driven by lower year-over-year aluminum premiums and sturdy demand for specialty containers.
The Food and Aerosol Packaging segment’s sales were $298 million, declining 10.2% year over year. Operating earnings also saw a 13.8% year-over-year improvement to $33 million.
In the Aerospace and Technologies segment, sales fell 16% year over year to $193 million. Operating earnings plummeted to $19 million from $20 million in the year-ago quarter. The segment’s backlog grew to more than $1 billion at the end of second quarter, with more of the new business awards being oriented to cost-plus contracts.
Financial Condition
Ball Corporation had cash and cash equivalents of $6,399 million at the end of second-quarter 2016 compared with $229 million at second-quarter 2015 end. As of quarter end, Ball Corporation’s long-term debt increased to $8.2 billion from $2.9 billion as of Jun 30, 2015.
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