Ball Corp. to Supply Flat Beer Cans - Analyst Blog
March 29 2012 - 7:00AM
Zacks
Ball
Corporation(BLL), the manufacturer of high quality
packaging, has been selected to supply three-piece, flat top beer
cans to Churchkey Can Company. The cans are made from
recyclable steel that sufficiently protect the beer both from light
and oxygen.
Churchkey, the producer of
Northwest-brewed Pilsner style craft beer, decided to bring back
the flat top beer cans of the past, invented in the mid 1930s. At
that time metal openers called church keys were used to open the
beer cans. The cans were finally pulled out of market in the
1960s.
The steel cans made by Ball Corp.
have the highest recycling rates of 66% and can be shipped easily
with minimum fuel to the brewery and retail outlets. Steel cans
that chill faster than bottles can be carried anywhere without the
fear of spilling the content.
In the recently reported quarter,
Ball Corp’s. adjusted earnings were 48 cents per share, down 10%
from the year ago quarter of 53 cents; missing the Zacks Consensus
Estimate of 54 cents per share. Total sales increased 3% year
over year to $2.1 billion and were in line with the Zacks Consensus
Estimate.
The weak performance in the quarter
was attributable to weaker beverage can volumes in North America
and Europe, in addition to six fewer accounting days. These
negatives were somewhat offset by strong operating profit and
continued growth in specialty packages.
Ball Corp. hopes to deliver strong
performance in the coming quarters by focusing on the Drive for 10
vision. Further, it expects that the investment made in 2011 and
Drive for 10 vision will help in generating 10%-15% earnings per
share growth in 2012 and beyond that. The Zacks Consensus
Estimate for 2012 is pegged at $3.08 per share.
Ball Corp. is all set to expand its
global metal beverage can business. Accordingly, in 2011, it
acquired a 40% interest in a beverage can joint venture plant at
Qingdao, China apart from inking a deal with Thai Beverage Can
Limited to build a manufacturing plant in Vietnam.
In addition, Ball Corp. has planned
to build another manufacturing plant in Alagoinhas, Brazil, in
collaboration with its Brazilian joint venture partner in Brazil.
Besides, it has also completed the acquisition of a leading
supplier of extruded aluminum aerosol cans and bottles in Europe,
Aerocan S.A.S.
Currently, the stock retains a
Zacks #3 Rank, implying a short-term “Hold” rating. Ball Corp.
competes with the companies like Crown Holdings
Inc. (CCK), Rexam Plc (REXMY) and
Silgan Holdings Inc. (SLGN).
Based in Broomfield, Colorado, Ball
Corp. is a manufacturer of metal packaging, primarily for beverages
and foods. It also supplies aerospace and other technologies and
services to government and commercial customers.
BALL CORP (BLL): Free Stock Analysis Report
CROWN HLDGS INC (CCK): Free Stock Analysis Report
REXAM PLC-ADR (REXMY): Free Stock Analysis Report
SILGAN HOLDINGS (SLGN): Free Stock Analysis Report
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