Ball Reports 3Q 2013 Results

Ball Corporation 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.

“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 CEO. “Our ongoing efforts to manage our cost structure and drive EVA dollar growth are beginning to pay off.”

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, Ball’s Milwaukee, WI, 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, 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.

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 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.

“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.