Business News

Ball Reports Third Quarter Results

Thursday 24. October 2013 - Highlights - Third quarter 2013 comparable earnings per diluted share of $1.00 vs. 90 cents in 2012 - Solid third quarter aerospace backlog at $942 million - Full-year free cash flow still expected to be in the range of $450 million - Net full-year share buyback expected to be in the range of $400 million

Ball Corporation (NYSE: BLL) today reported third quarter net earnings attributable to the corporation of $115.2 million, or 78 cents per diluted share, on sales of $2.3 billion, compared to $115.1 million, or 73 cents per diluted share, on sales of $2.3 billion in the third quarter of 2012. Third quarter 2013 net earnings include after tax charges of $32.0 million, or 22 cents per diluted share, of which $18 million or 12 cents per diluted share relate to a provision for a customer receivable, with the remaining after tax charges related to business consolidation and other costs.
Results for the first nine months of 2013 were net earnings attributable to the corporation of $282.3 million, or $1.88 per diluted share, on sales of $6.5 billion, compared to $342.9 million, or $2.16 per diluted share, on sales of $6.6 billion in the first nine months of 2012. Year-to-date 2013 net earnings include after tax charges of $80.5 million for business consolidation costs, discontinued operations and a provision for a customer receivable.
Comparable 2013 earnings per diluted share for the third quarter and year-to-date were $1.00 and $2.42, respectively versus third quarter and year-to-date 2012 comparable earnings per diluted share of 90 cents and $2.42, respectively. Details of comparable segment earnings and business consolidation activities can be found in Notes 1 and 2 to the unaudited consolidated financial statements that accompany this news release.
“Better than expected global beverage can volumes, an improved seasonal vegetable harvest and solid execution companywide led to improved operational results,” said John A. Hayes, chairman, president and chief executive officer. “Our ongoing efforts to manage our cost structure and drive EVA dollar growth are beginning to pay off.”
Metal Beverage Packaging, Americas & Asia
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $134.8 million in the third quarter on sales of $1.1 billion, compared to $142.2 million on sales of $1.2 billion in the third quarter of 2012. For the first nine months, comparable segment operating earnings were $364.5 million on sales of $3.2 billion, compared to $384.5 million on sales of $3.4 billion during the same period in 2012.
Despite segment volumes being down mid-single digits for the quarter due to the previously announced loss of business in North America, growth in specialty containers increased double digits. In North America, our Milwaukee, Wis., facility ceased production of 12-ounce beverage cans, while other regional specialty can lines ramped up production. The Alagoinhas, Brazil, facility completed installation of a second can line capable of manufacturing multiple can sizes. The Chinese beverage can market continued high single-digit growth.
Metal Beverage Packaging, Europe
Metal beverage packaging, Europe, results in the quarter were comparable segment operating earnings of $60.5 million on sales of $488.9 million, compared to $54.3 million on sales of $450.8 million in 2012. Results for the first nine months were comparable segment operating earnings of $143.2 million on sales of $1.4 billion, compared to $152.7 million on sales of $1.4 billion in 2012.
Third quarter comparable earnings benefitted from stronger than expected volume growth, improved operating efficiencies and initial progress on cost-out initiatives announced in the first half of 2013.
Metal Food & Household Products Packaging
Metal food and household products packaging results in the third quarter were comparable segment operating earnings of $58.4 million on sales of $463.6 million, compared to $50.1 million in 2012 on sales of $445.8 million. Year-to-date results were comparable segment operating earnings of $140.6 million on sales of $1.2 billion, compared to $131.0 million on sales of $1.2 billion in 2012.
Segment volumes were up near double digits and contributed favorably to third quarter operational results. Solid global demand for aerosol containers, as well as improved year-over-year volumes in North America drove volume growth. Ball continues to invest in its extruded aluminum manufacturing capabilities to meet increasing market demand.
Aerospace and Technologies
Aerospace and technologies results were comparable segment operating earnings of $18.0 million on sales of $217.5 million in the third quarter, compared to $22.5 million on sales of $219.9 million in 2012. For the first nine months, comparable segment operating earnings were $55.0 million on sales of $675.0 million compared to $62.4 million on sales of $631.8 million during the same period last year. Backlog at the end of the quarter was $942 million.
A diverse contract portfolio and solid quarter-end backlog level continue to provide ongoing business stability. During the quarter, the Wide-field Infrared Survey Explorer (WISE) spacecraft emerged from a two-year hibernation to resume its near-Earth asteroid hunting mission. Additionally, the STPSat-3 satellite, which is the primary satellite for the U.S. Air Force Operationally Responsive Space-3 enabler mission, was delivered to Wallops Flight Facility.
Outlook
“We still anticipate free cash flow in the range of $450 million after capital expenditures of approximately $400 million,” said Scott C. Morrison, senior vice president and chief financial officer. “We will return the majority of our free cash flow to shareholders through share repurchases and dividends.”
“Although global economic circumstances continue to be challenging, our third quarter operational performance and strong free cash generation reflect our increasing momentum as we head into 2014,” Hayes said.