Packaging

Ball Reports Strong Second Quarter Results

Monday 04. August 2014 - Highlights - Second quarter 2014 comparable earnings per diluted share of $1.13 vs. 85 cents in 2013 - Global demand for beverage cans remained favorable - Aerospace contracted backlog at the end of the quarter remains solid at $858 million - Full-year free cash flow expected to exceed $550 million

Ball Corporation (NYSE:BLL) today reported second quarter net earnings attributable to the corporation of $153.1 million, or $1.07 per diluted share (including after tax charges of $7.7 million, or 6 cents per diluted share for business consolidation costs) on sales of $2.3 billion, compared to $95.1 million, or 63 cents per diluted share, on sales of $2.2 billion in the second quarter of 2013. Results for the first six months of 2014 were net earnings attributable to the corporation of $246.6 million, or $1.72 per diluted share, on sales of $4.3 billion, compared to $167.1 million, or $1.10 per diluted share, on sales of $4.2 billion in the first six months of 2013.
Comparable 2014 earnings per diluted share for the second quarter and year-to-date were $1.13 and $1.94, respectively, versus second quarter and year-to-date 2013 comparable earnings per diluted share of 85 cents and $1.43, respectively.
Details of comparable segment earnings, business consolidation activities and historical segment reporting can be found in the notes to the unaudited consolidated financial statements that accompany this news release.
“Our improved second quarter results were due to improving demand for beverage cans, excellent performance in our global beverage operations and solid program execution in our aerospace business,” said John A. Hayes, chairman, president and chief executive officer.
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $142.0 million in the second quarter on sales of $1.1 billion, compared to $125.7 million on sales of $1.1 billion in 2013. For the first six months, comparable segment operating earnings were $266.9 million on sales of $2.1 billion, compared to $229.7 million on sales of $2.1 billion during the same period in 2013.
Stronger than expected demand for metal beverage packaging in North America aided results during the quarter. In Brazil and China, volumes grew double digits year-over-year due to increasing can penetration in beer packaging. In May, we announced the expansion of our Southeast Asia operations with the construction of a one-line plant in Myanmar, which will start up in mid-2015.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, comparable segment results in the quarter were operating earnings of $73.7 million on sales of $558.4 million, compared to $51.8 million on sales of $508.7 million in 2013. Results for the first six months were comparable segment operating earnings of $129.2 million on sales of $1.0 billion, compared to $82.7 million on sales of $911.6 million in 2013.
Mid-single-digit volume growth for beverage cans across Europe continued and our ongoing cost management programs favorably impacted second quarter results. Construction has begun at our existing Oss, Netherlands, facility to increase capacity through the addition of a new line, which will start up in the second quarter of 2015.
Metal Food & Household Products Packaging
Metal food and household products packaging comparable segment results in the quarter were operating earnings of $39.8 million on sales of $367.7 million, compared to $47.5 million on sales of $382.6 million in 2013. Year-to-date results were comparable segment operating earnings of $76.1 million on sales of $708.8 million, compared to $82.2 million on sales of $749.8 million in 2013.
Segment results and volumes were down in the quarter, influenced by low single-digit volume declines for steel containers and manufacturing inefficiencies in the U.S. Stronger demand for aluminum aerosol containers in Europe and Mexico, and improved manufacturing performance in Mexico contributed to results.
Aerospace and Technologies
Aerospace and technologies comparable segment results were operating earnings of $24.8 million on sales of $241.1 million in the quarter, compared to $19.1 million on sales of $226.1 million in 2013. For the first six months, comparable segment operating earnings were $48.9 million on sales of $461.8 million compared to $37.0 million on sales of $457.5 million during the same period last year. Backlog at the end of the quarter was $858 million.
Ongoing excellent program execution and solid contracted backlog contributed to segment results. During the quarter, Ball Aerospace began work on a fixed-price contract for the Stalker long-range, electro-optical laser sensor system (SLREOSS) under a contract to the NATO Seasparrow Project Office. The Stalker system will significantly enhance the Navy’s ability to detect, classify, identify and determine hostile intent of potential threats to its ships. Ball’s support to the NATO Seasparrow Project Office spans more than four decades and is the segment’s longest continuously running project.
Outlook
“Year-to-date we have returned more than $250 million to shareholders in the form of share repurchases and dividends, and we expect free cash flow to exceed $550 million for 2014,” said Scott C. Morrison, senior vice president and chief financial officer.
“Our second quarter results exceeded our expectations. While we still have a few manufacturing challenges and tough volume comparisons in the second half, we remain confident in our ability to increase EVA dollar generation and achieve our long-term diluted earnings per share growth goal of 10 to 15 percent in 2014,” Hayes said.