Ball Reports 2Q 2015 Results

Ball Corporation reported second quarter 2015 net earnings attributable to the corporation of $160.4 million, or $1.13 per diluted share (including net after tax income of $35.0 million, or 24 cents per diluted share for debt refinancing, economic hedging gains, business consolidation and other costs) on sales of $2.2 billion, compared to $153.1 million, or $1.07 per diluted share, on sales of $2.3 billion in the second quarter of 2014.
 
Results for the first six months of 2015 were net earnings attributable to the corporation of $181.1 million, or $1.28 per diluted share, on sales of $4.1 billion, compared to $246.6 million, or $1.72 per diluted share, on sales of $4.3 billion in the first six months of 2014.
 
Comparable earnings per diluted share for the second quarter and year-to-date 2015 were 89 cents and $1.57, respectively, versus second quarter and year-to-date 2014 comparable earnings per diluted share of $1.13 and $1.94, respectively.
 
“As we have been discussing throughout this year, headwinds related to foreign currency translation, higher metal premiums in Europe, deferred compensation costs associated with director retirements and project start-up costs related to growth capital investments persisted and totaled 23 cents and 39 cents, respectively, in the second quarter and first half of 2015. Numerous capital projects are underway in North America, Europe and Southeast Asia and will fully ramp up in late 2015 and the first half of 2016,” said John A. Hayes, chairman, president and CEO “On July 28, 2015, at a special shareholder meeting, Ball shareholders approved the Share Issuance Proposal related to the one-third equity portion of the purchase price for our proposed offer for Rexam PLC. Our work continues on securing necessary regulatory approvals to complete the acquisition.”
 
Metal beverage packaging, Americas and Asia, comparable segment operating earnings in the second quarter 2015 were $126.5 million on sales of $1.1 billion, compared to $142.0 million on sales of $1.1 billion in second quarter 2014. For the first six months, comparable segment operating earnings were $251.5 million on sales of $2.2 billion, compared to $267.1 million on sales of $2.1 billion during the same period in 2014.
 
Mid-single digit growth for specialty beverage packaging in North America was unable to offset continued weakness in standard 12-ounce carbonated soft drink containers and anticipated softer can demand in Brazil due to challenging year-over-year comparisons following the 2014 World Cup. In China, cost-out initiatives are progressing in order to address the difficult pricing environment and volumes were flat in the quarter.
 
Metal beverage packaging, Europe, comparable segment earnings in the second quarter 2015 were operating earnings of $59.6 million on sales of $481.0 million, compared to $73.7 million on sales of $558.4 million in the second quarter 2014. Results for the first six months were comparable segment operating earnings of $88.5 million on sales of $860.2 million, compared to $129.2 million on sales of $1.0 billion in 2014.
 
Low-single-digit volume growth for beverage cans across Europe was not enough to offset unfavorable currency translation and higher aluminum premiums. On a euro basis, comparable segment earnings were flat in the quarter.
 
“We continue to expect 2015 free cash flow to be in the range of $600 million, excluding cash costs for the proposed Rexam acquisition, and we have executed additional currency and interest rate hedges to mitigate risk related to the proposed acquisition and to lock in the transaction’s purchase price economics,” said Scott C. Morrison, SVP and CFO.
 
“Our second quarter was largely in line with our expectations given lower than expected volumes and anticipated headwinds from currency translation, metal premiums and start-up costs. We still expect that second half 2015, as compared to first half 2015, should improve as we cycle off difficult year-over-year comparisons and aluminum premiums become a tailwind that continues into 2016,” Hayes said.