Ball Corp Earnings: Margins Shrink as Costs Rise, Profit Falls

S&P 500 (NYSE:SPY) component Ball Corporation (NYSE:BLL) reported its results for the fourth 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 Fourth Quarter

Results: Net income for the packaging and containers company fell to $77.5 million (47 cents per share) vs. $92.2 million (52 cents per share) a year earlier. This is a decline of 15.9% from the year earlier quarter.

Revenue: Rose 2.8% to $2.05 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: BLL reported adjusted net income of 48 cents per share. By that measure, the company fell short of mean estimate of 54 cents per share. Analysts were expecting revenue of $2.07 billion.

Quoting Management: “Ball Corporation’s 2011 full-year comparable earnings per share increased more than 15 percent compared to 2010, in an economic environment that remains challenging across much of the world,” said John A. Hayes, president and chief executive officer. “Our improved 2011 performance was the result of maximizing value in our existing businesses, expanding into new products and capabilities, broadening our geographic reach, aligning ourselves with the right customers and markets and leveraging our technological expertise – all key strategies in our Drive for 10 vision to achieve continued long-term growth.”

Key Stats:

Gross margin shrank 0.8 percentage point to 17%. The contraction appeared to be driven by increased costs, which rose 3.9% from the year earlier quarter while revenue rose 2.8%.

Revenue has risen the past four quarters. Revenue increased 11% to $2.26 billion in the third quarter. The figure rose 15.1% in the second quarter from the year earlier and climbed 17.9% in the first quarter from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 41.9% from the year earlier quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 81 cents versus a mean estimate of net income of 78 cents per share.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next quarter performance. The average estimate for the first quarter of the next fiscal year is now 65 cents per share, down from 68 cents. The average estimate for the fiscal year is $2.78 per share, a rise from $2.75 ninety days ago.

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).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com