2023-05-04 15:00:30 ET
Ball Corporation ( NYSE: BALL ) shares rocketed to a double-digit gain after notching stronger than expected profits for the first quarter.
The Colorado-based packaging provider posted $0.69 in earnings per share, well above the $0.51 consensus expectation while a 6.2% decline in revenue year over year to $3.49B was a slightly steeper decline than anticipated. The company explained that global beverage can shipments declined 6.7% as compared to 2022, owing to the divestment of the Russian business that affected an 8.1% negative volume impact.
"We delivered strong first quarter results amid tough year-over-year comparisons driven largely by 2022 business divestments,” CEO Daniel W. Fisher said. “Notable inflationary cost recovery, benefits of cost-out actions as well as improved operational efficiencies and aerospace program execution will significantly improve full-year results and more than offset higher interest expense and tepid first-half volume trends driven by varying global macroeconomic conditions impacting consumer demand.”
Management indicated that it will continue to focus on profitability amid an uncertain macro backdrop in 2023. This includes a plan to “prudently manage production output” in accordance with demand, especially as “inventory levels of coil aluminum and finished cans are expected to normalize” during the busy summer season. Reduced fixed costs are expected to aid results in the second half of the year.
"We continue to actively manage our businesses through the lens of Drive for 10 and EVA. Our team remains focused on maximizing returns, improving free cash conversion, driving organic growth by leveraging sustainability and innovation tailwinds and being good stewards of our capital,” Fisher said. “We look forward to driving a circular economy through the broader use of sustainable aluminum packaging and exquisite environmental, aerospace and defense technologies to preserve our planet and achieving our recently disclosed Climate Transition Plan through collaboration with our supply chain partners. Including or excluding the Russian business divestment headwind and year-to-date demand trends, we remain positioned in 2023 to achieve our long-term diluted earnings per share growth goal of 10 to 15 percent, improve EVA generation, and increase cash flow to deleverage and return value to shareholders in 2023 and beyond.”
Shares of Ball Corporation ( BALL ) carried 14.22% higher in afternoon trading.
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Ball Corporation stock surges 15% on profit beat