Ball Reports 1Q 2015 Results

Ball Corporation reported first quarter 2015 net earnings attributable to the corporation of $20.7 million, or 15 cents per diluted share (including after tax charges of $76.1 million, or 54 cents per diluted share for business consolidation, debt refinancing and other costs) on sales of $1.9 billion.
 
This compares to $93.5 million, or 65 cents per diluted share (including after tax charges of $23.8 million, or 16 cents per diluted share for business consolidation costs, debt extinguishment costs and other activities), on sales of $2.0 billion in the first quarter of 2014.
 
Comparable earnings per diluted share were 69 cents in the first quarter 2015 versus 81 cents in the first quarter of 2014.
 
“First quarter results were largely impacted by expected headwinds totaling 16 cents per diluted share from foreign currency translation, higher metal premiums in Europe, and start-up costs related to growth capital investments. We continue to invest in our future with ongoing capital projects in North America, Europe and Southeast Asia that will fully ramp up in the second half of 2015 and the first half of 2016,” said John A. Hayes, chairman, president and CEO.
 
“On Feb. 19, 2015, we announced our proposed offer for Rexam PLC, which aligns with our long-standing capital allocation strategy and Drive for 10 vision,” Hayes added. “Our work to secure necessary regulatory approvals to complete the acquisition is proceeding as expected.”
 
Metal beverage packaging, Americas and Asia, comparable segment earnings in the first quarter 2015 were $125.0 million on sales of $1.0 billion, compared to $125.1 million on sales of $1.0 billion in the first quarter 2014.
 
Solid demand for specialty beverage packaging in North America offset continued weakness in carbonated soft drink containers, while volumes were down in Brazil due to challenging year-over-year comparisons following the 2014 World Cup and customer mix issues. In China, although volumes were strong due to the timing of the Chinese New Year, industry overcapacity continues to pressure market pricing. Additionally, to support the growing demand for standard and specialty metal beer packaging in Mexico, Ball is constructing a two-line can plant in Monterrey, which will begin production in the first half of 2016.
 
Metal beverage packaging, Europe, comparable segment earnings in the first quarter 2015 were $28.9 million on sales of $379.2 million, compared to $55.5 million on sales of $450.2 million in the first quarter 2014.
 
Unfavorable currency effects, higher aluminum premiums and start-up costs associated with the Oss plant expansion impacted first quarter results. Operating performance is expected to improve in the second half of the year as the Oss specialty can line begins production.
 
Metal food and household products packaging comparable segment earnings in the first quarter 2015 were $30.2 million on sales of $308.3 million, compared to $36.3 million on sales of $341.1 million in the first quarter 2014.
 
North American steel and global aluminum aerosol volumes improved in the quarter and the company continues to invest in next generation steel aerosol manufacturing technology, as well as aluminum aerosol capacity in North America, the United Kingdom and India. During the quarter, the company also acquired an easy-open end business in Canton, OH, to broaden its customer product offering.
 
Aerospace and technologies comparable quarterly segment earnings in the first quarter 2015 were $20.0 million on sales of $214.8 million, compared to $24.1 million on sales of $220.7 million in the first quarter 2014.
 
This month, Ball is celebrating the 25th anniversary of the Hubble Space Telescope, for which Ball built seven optical instruments. Contracted backlog levels were $713.7 million for the quarter and the segment continues to pursue several large programs that are expected to be awarded in the coming months.
 
 “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 initiated multiple currency and interest rate hedges to mitigate risk related to the proposed acquisition,” said Scott C. Morrison, SVP and CFO.
 
“Operationally, our first quarter results were largely in line with our expectations. While metal premiums and start-up costs will persist in the second quarter, and currency translation will remain a headwind for the balance of the year, our business remains solid,” Hayes said.