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Crown Holdings (CCK) Earnings & Sales Beat Estimates in Q2

·4-min read

Crown Holdings, Inc. CCK reported second-quarter 2022 adjusted earnings per share (EPS) of $2.10, beating the Zacks Consensus Estimate of $2.03. The bottom line declined 2% year over year while meeting the upper range of the EPS guidance of $2.00-$2.10.

Including one-time items, the company reported earnings of $2.43 per share in the quarter under review compared with 95 cents per share in the prior-year quarter.

Net sales in the quarter totaled $3,510 million, up from the year-ago quarter’s $2,856 million. The top line benefited from increased beverage can unit volumes and pass-through of higher material costs. The reported figure surpassed the Zacks Consensus Estimate of $3,314 million.

Cost and Margins

The cost of products sold increased 27% year over year to $2,861 million. On a year-over-year basis, gross profit moved up 6% to $649 million. Gross margin contracted to 18.4% from the year-ago quarter’s 21.4%.
    
Selling and administrative expenses were down 5% year over year to $140 million. Segment operating income came in at $432 million during the quarter under review compared with the prior-year quarter’s $395 million. The operating margin came in at 12.3% compared with 13.8% 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 totaled $1,378 million, up 26% year over year. Segment operating profit increased 9.6% year over year to $216 million.

The European Beverage segment’s sales rallied 25% year over year to $599 million. Operating income came in at $56 million compared with the year-ago quarter’s $78 million.

The Asia-Pacific segment’s revenues totaled $432 million, up 31% year over year. Operating profit was $55 million compared with the prior-year quarter’s $47 million.

Revenues in the Transit Packaging segment totaled $691 million compared with the year-ago quarter’s $637 million. Operating profit declined 9.7% year over year to $74 million.

Financial Update

Crown Holdings had cash and cash equivalents of $438 million at the end of second-quarter 2022, down from $566 million at the end of the prior-year quarter. The company generated $196 million in cash from operating activities in the first half of 2022 compared with $169 million in the prior year period.

Crown Holdings’ long-term debt declined to $5,466 million at the end of the second quarter, from $7,879 million at the prior-year quarter’s end.

Business Update

Crown Holdings closed the sale of the Transit Packaging segment's Kiwiplan business for $180 million. The company recorded an after-tax gain of approximately $102 million related to the transaction.

Outlook

Crown Holdings projects third-quarter 2022 adjusted EPS between $1.75 and $1.85. For the current year, the company anticipates adjusted EPS in the band of $7.65-$7.85.

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.

Price Performance

Crown Holdings’ shares have declined 10% in the past six months compared with the industry’s fall of 14%.

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Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the Industrial Products sector are Greif Inc. GEF, Titan International TWI and RBC Bearings ROLL. While GEF and TWI each flaunt a Zacks Rank #1 (Strong Buy), ROLL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 17%.

Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. The company’s shares have gained 14.7% in the past year.

Titan International has an estimated earnings growth rate of 165% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 43%.

Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. The company’s shares have appreciated 114.7% in a year’s time.

RBC Bearings has an expected earnings growth rate of 48% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 6% in the past 60 days.

RBC Bearings has a trailing four-quarter earnings surprise of 3.4%, on average. ROLL’s shares have moved up 7.4% in the past year.


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