Ball Corp. to Supply Flat Beer Cans - Analyst Blog

Date : 03/29/2012 @ 7:00AM
Source : Zacks
Stock : Crown Holdings, Inc. (CCK)
Quote : 51.29  0.09 (0.18%) @ 3:59PM
Crown share price Chart

Ball Corp. to Supply Flat Beer Cans - Analyst Blog

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
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REXAM PLC-ADR (REXMY): Free Stock Analysis Report
SILGAN HOLDINGS (SLGN): Free Stock Analysis Report
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