“Stable beverage can volumes in North America, stronger than expected volumes in Europe and Brazil, as well as excellent plant and program performance, led to our strong first quarter results,” said John A. Hayes, chairman, president and CEO. “We are pleased with our results and our people continue to rise to any challenges we might face.”
Metal beverage packaging, Americas and Asia, comparable segment operating earnings were $124.9 million in the first quarter on sales of $997.6 million, compared to $104.0 million on sales of $995.2 million in 2013.
Solid demand for specialty beverage packaging and strong beer can volumes in North America, coupled with a lower cost asset base, enabled Ball to offset continued weakness in carbonated soft drink consumption. In Brazil, volumes continued to grow year-over-year due to the addition of the second line in Ball’s Alagoinhas beverage can plant, favorable weather and strong demand in advance of the 2014 World Cup. In China, volumes were down slightly due to tight capacity in the system and the transition from the relocation of Ball’s Shenzhen facility. Strong plant performance and efficiencies related to the Foshan plant optimization aided results.
Metal beverage packaging, Europe, comparable segment results in the quarter were operating earnings of $55.5 million on sales of $450.2 million, compared to $30.9 million on sales of $402.9 million in 2013. Mid-single-digit volume growth for beverage cans across Europe, as well as excellent plant performance and good progress on cost management programs, favorably impacted first quarter results.
Metal food and household products packaging comparable segment results in the quarter were operating earnings of $36.3 million on sales of $341.1 million, compared to $34.7 million on sales of $367.2 million in 2013. Segment results in the quarter were influenced by weaker demand in U.S. food and aerosol containers. In Europe, stronger than expected volumes and the commercial rollout of Ball’s lightweight, recycled content extruded aluminum container contributed to stronger results.
Aerospace and technologies comparable quarterly segment results were operating earnings of $24.1 million on sales of $220.7 million, compared to $17.9 million on sales of $231.4 million in 2013. Segment earnings reflected consistent delivery of contracted product and effective completion of key program milestones. During the quarter, the planet-hunting Kepler Mission celebrated five years of operations since its 2009 launch from Cape Canaveral Air Force Station in Florida. Additionally, GMI, the multi-channel, conical-scanning microwave radiometer built for NASA, successfully launched in late February and began collecting data on the Earth’s rain and snow fall. Contracted backlog levels were $868 million for the quarter and the segment is pursuing several large programs that are expected to be awarded by year end.
“Year-to-date we have returned more than $200 million to shareholders in the form of share repurchases and dividends, and we continue to expect free cash flow in the range of $550 million for 2014,” said Scott C. Morrison, senior vice president and CFO.
“Our first quarter results exceeded our expectations. While challenges still exist, 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.