Ball Earnings Call Nuggets: Pricing Pressure in Asia and Aggregate of Profit Performance

Ball Corporation (NYSE:BLL) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Pricing Pressure in Asia

Anthony Pettinari – Citibank: You referenced pricing pressure in Asia and I’m just wondering did that pressure accelerate over the three months of the quarter and then as we’ve moved into January have you seen that pressure abate or how’s the beginning of the year?

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John A. Hayes – President and CEO: Well as we said I think on the third quarter that we anticipated pricing pressures in China and that’s exactly what’s happened. The negotiation season was the fourth quarter and we did see pricing pressure there, most of those negotiations are over now and so as we go into ’13 it’s about execution.

Anthony Pettinari – Citibank: Couple of years ago I think you disclosed that your market share in China was 31% and I’m wondering, given that you’ve been a little bit more disciplined regarding capacity than some your competitors and may be walked away from business, has your market share meaningful changed from that 31% or can you provide any kind of quantification around that.

John A. Hayes – President and CEO: Well, I’d tell you in 2012 we grew roughly in line with what the market grew. So our market share was relatively the same. We have delayed capital and have chosen not to add any significant capital in China going into ’13. So we see our volume growth in ’13 to be at or slightly below what the market is doing, so we could lose a little bit of market share, but what we’re trying to do is make sure our businesses is healthy as possible from a pricing perspective.

Aggregate of Profit Performance

George Staphos – Bank of America Merrill Lynch: I wanted to go back to the Americas Asian beverage can segment. As you look out to ’13 now, versus where you were say three months ago, has anything changed markedly, would it be pricing in China or is the aggregate of profit performance and the complexion that drives that more or less as you anticipated back in September or October?

Scott C. Morrison – Senior Vice President and CFO: It really hasn’t changed markedly, George. There’s definitely some headwinds that we – that John talked about, you know, the pricing pressure, the loss of volume in North America, but our guys have done a great job responding to those issues and growth in specialty capacity we’re still seeing growth, in Brazil we’re still seeing, so it hasn’t changed markedly. Some of the levers may have changed a little bit, but in general we’re still sync on outlook.

George Staphos – Bank of America Merrill Lynch: Scott, considering that last quarter you were talking about how apparently anyway good growth in specialty can demand and opportunities was for you and that seems like it’s the case again this quarter. If I more or less hold that constant, and maybe that’s not the right assumption, it seems like the – if there has been anything that has changed, it sounds like it has changed for the negative, it would be again the pricing in China would that be a fair statement?

Scott C. Morrison – Senior Vice President and CFO: Yeah, I think that a fair statement.

George Staphos – Bank of America Merrill Lynch: Now in terms of guidance, in terms of striving for the long-term goal of 10% to 15%, does that suggest something more aspirational long-term or is that something you think is within your sights for 2013, remembering the Company’s old phrase, you’d rather be heroes in December than in January? You can give (indiscernible) credit for that.

John A. Hayes – President and CEO: I remember on the third quarter I said that our long-term ranges 10% to 15%, this can be quite challenging to get to the upper end of the range, but we’re going to strive to get to the lower end of the range and that’s where we are right now. It is only January, various things have to happen, but as we sit here right now, we have some challenges on our hands, but we think that we can push – if we push in our successful and many initiatives we have, we might be able to get to that – to the lower end of the 10% to 15% earnings per share growth.

George Staphos – Bank of America Merrill Lynch: Last question I will turn it over. Can you provide a bit more color commentary on the consolidation activities that you have ongoing in metal packaging in the Americas. You obviously have some charges in the fourth quarter in beverage, which have been well discussed and telegraphed, but also in food you have some things going on. Is that mostly the integration of Mexico, what else is in there?

Scott C. Morrison – Senior Vice President and CFO: On the beverage side, everything is on schedule. We closed the Columbus facility at the end of the year. Gainesville will close in the first half of this year, all that’s on track to what we expected. On the food side that was the close out of Canadian pension plans, so where we annuitized it and we had talked about that in both third quarter call and then we’re really excited about the acquisition that we made down in Mexico and the opportunities there going forward in 2013.