Ball Corp Earnings Cheat Sheet: Higher Expenses Shrinks Margins, Profit Declines

S&P 500 (NYSE:SPY) component Ball Corporation (NYSE:BLL) reported its results for the third quarter. Ball Corporation supplies metal and plastic packaging to the household products, food and beverage industries as well as aerospace and other technologies and services to governmental and commercial customers.

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Ball Earnings Cheat Sheet for the Third Quarter

Results: Net income for the packaging and containers company fell to $137.5 million (79 cents per share) vs. $227.5 million ($1.25 per share) a year earlier. This is a decline of 39.6% from the year earlier quarter.

Revenue: Rose 11% to $2.26 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BLL beat the mean analyst estimate of 78 cents per share. Analysts were expecting revenue of $2.22 billion.

Quoting Management: “Ball’s comparable results improved despite continued, wider global economic uncertainty,” said John A. Hayes, president and chief executive officer. “Our company’s third quarter performance benefited from strong demand for metal packaging in China and Brazil, improved metal beverage can volumes in North America, exceptional aerospace program performance and a lower effective tax rate driven primarily by tax benefits from foreign exchange on a local currency basis in Brazil. All of our operations are doing an excellent job in a challenging operating environment as we maximize value in our existing businesses and expand in growing, emerging markets.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose more than twofold from the year earlier, while the figure increased 15.1% in the first quarter, 13.3% in the fourth quarter of the last fiscal year and more than twofold in the third quarter of the last fiscal year.

Gross margin shrank 1.2 percentage points to 17.5%. The contraction appeared to be driven by increased costs, which rose 12.6% from the year earlier quarter while revenue rose 11%.

Revenue has risen the past four quarters. Revenue increased 15.1% to $2.31 billion in the second quarter. The figure rose 17.9% in the first quarter from the year earlier and climbed 7% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 85 cents versus a mean estimate of net income of 86 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 54 cents per share, down from 59 cents ninety days ago. For the fiscal year, the average estimate has moved down from $2.87 a share to $2.75 over the last ninety days.

Competitors to Watch: Crown Holdings, Inc. (NYSE:CCK), Silgan Holdings Inc. (NASDAQ:SLGN), Bway Holding Company (BWY), and Dominguez y Cia., S.A. (NYSE:DOM).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)