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Ball Corp.'s earnings fall short in first quarter, free cash flow expectations high for 2013
By Lisa Kerner
Charlotte, N.C., April 25 - Ball Corp.'s first-quarter earnings were below expectations, and the European beverage container business results were disappointing, said John A. Hayes, chairman, president and chief executive officer, during the company's earnings conference call on Thursday.
According to Hayes, while "we dug ourselves a hole in the first quarter," he expects the remainder of the year to be largely in line with expectations, but much more back-end weighted.
While the long-term goal of 10% to 15% diluted earnings per share growth in 2013 is unlikely, Ball continues to target free cash flow of about $450 million.
Comparable earnings per share were down 8% for the quarter, said chief financial officer Scott Morrison on the call.
Ball reported first-quarter net earnings of $72 million, or 47 cents per diluted share, on sales of $2 billion, compared to $88.3 million, or 55 cents per diluted share, on sales of $2 billion in the first quarter of 2012. Comparable earnings per diluted share were 58 cents, versus 2012 first-quarter results of 63 cents.
Solid liquidity
At quarter-end, Ball had net balance sheet debt of $3.4 billion, according to Morrison, and the company's credit quality and liquidity remain "solid."
Ball's EBITDA to interest coverage is 4.9 times, and its net debt to comparable EBITDA is at 3.1 times.
Morrison said he expects net debt at year-end to be at $3.1 billion.
The company had cash of $208 million at March 31, compared to about $107 million at April 1, 2012.
Ball is a Broomfield, Colo.-based supplier of packaging for beverage, food and household products.
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