Beverage Can Maker Ball Q4 Sales Dip Amid Mass Beer Brand Disruption In US: Details

Ball Corp BALL reported a fourth-quarter fiscal 2023 net sales decline of 4.1% year-over-year to $3.40 billion, missing the consensus of $3.58 billion.

Sales by segments: Beverage packaging North and Central America $1.38 billion (-8.7% Y/Y), Beverage packaging EMEA $739 million (-1.2% Y/Y), Beverage packaging South America $616 million (+0.33% Y/Y) and Aerospace $500 million (-1.2% Y/Y).

Comparable operating earnings for the quarter increased by 58% Y/Y to $425 million. Adjusted EPS was $0.78, up from $0.44 prior year, beating the consensus of $0.74.

The company said Beverage packaging, North and Central America, segment comparable operating earnings increased year-over-year due to contractual inflation recovery, cost savings and improved operating performance despite lower than anticipated volume primarily driven by its customer exposure to a U.S. mass beer brand disruption.

Operating cash flow for the fiscal 2023 totaled $1.86 billion, compared to $301 million a year ago. BALL generated $818 million in free cash flow and returned $255 million to shareholders in 2023.

During the quarter, BALL announced plans to halt production at its Kent, Washington facility in early 2024, aligning supply with demand and ensuring customer access to quality aluminum products. This move, along with other actions, aims to balance market needs and achieve better capital returns.

“Those actions coupled with sequential volume improvement, operational efficiencies and the planned deployment of aerospace sale proceeds to reduce leverage and accelerate share repurchases, position the business for continued diluted earnings per share growth, strong free cash flow generation and return of value to shareholders in 2024 and beyond,” commented Daniel W. Fisher, chairman and CEO.

Looking ahead to 2024, the company expects incremental volume recovery and continuous improvement in cost management to drive comparable operating earnings and strong free cash flow generation.

“In 2024, we are positioned to grow diluted earnings per share, generate strong free cash flow and accelerate return of value to shareholders,” Fisher added.

Price Action: BALL shares are trading lower by 1.23% at $51.50 on the last check Thursday.