Crown Holdings has announced its financial results for the third quarter ending September 30, 2013.
Highlights of the report include an income per diluted share of $0.81; before certain items of $1.13, showing a 13% increase; $300m in YTD share repurchases and Q3 global beverage can volumes up by 6%.
Net sales in the third quarter grew to $2,389m over the $2,302m in the third quarter of 2012, primarily due to increased global beverage can volumes and $26m from the impact of foreign currency translation, partially offset by the pass-through of lower raw material costs.
Europe demand for food cans below expectation
"Sales, segment income and earnings per share all increased over 2012 levels,” said John Conway, chairman and CEO, Crown Holdings.
“Crown's global beverage can sales continued to increase well ahead of global market growth because of our strong presence in the world's leading growth markets. Our new beverage can plants and capacity in Turkey, Brazil, China and Southeast Asia increased sales significantly over third quarter 2012.
"Our food, aerosol and specialty businesses performed well relative to the industry, however demand for food cans in Europe was below expectation principally due to end user cyclical demand weakness. As the European economies recover from recession, we expect food can demand to rebound.”
Looking ahead to further growth
Third quarter gross profit improved to $394m over $369m in the 2012 third quarter, due to increased beverage can volumes, lower depreciation expense and $5m of favorable foreign currency translation.
Selling and administrative expense increased to $95m in the third quarter over the $92m in the prior year third quarter, including $2m of increase due to foreign currency translation.
Segment income (a non-GAAP measure defined by the Company as gross profit less selling and administrative expense) rose to $299m in the third quarter over the $277m in the third quarter of 2012, including $3m of improvement due to foreign currency translation.
"Looking ahead, we are confident that Crown's uniquely balanced product portfolio and geographic presence of high quality metal packaging provides a strong foundation for future unit volume, free cash flow and profit growth," added Conway.
Initiative to reduce headcount
Interest expense in the third quarter was $58m compared to $57m in the third quarter of 2012 due to higher average debt outstanding.
In the third quarter of 2013, the company recorded restructuring charges of $33m ($28m, net of tax, or $0.20 per diluted share) primarily in connection with an initiative to reduce headcount across its European operations.
The company also recorded tax charges of $18m ($0.13 per diluted share) related to new tax legislation enacted during the quarter.
Net income attributable to Crown Holdings in the third quarter was $113m compared to $325m in the third quarter last year. Income per diluted share was $0.81 in the third quarter compared to $2.20 in the third quarter of 2012. Net income per diluted share before certain items increased to $1.13 over the $1.00 in the third quarter of 2012.
During the third quarter, the company repurchased 2.5m shares of its outstanding common stock for $106m through open market purchases and has now purchased 6.9m shares for $300m in the first nine months of 2013.