Factors Setting The Tone For Ball Corp's (BLL) Q3 Earnings

Ball Corporation (NYSE:BLL) is scheduled to report third-quarter 2019 results on Oct 31, before the opening bell. The company’s results are likely to reflect benefits from strong demand for aluminum packaging, solid backlog in the aerospace segment and focus on cost-cutting actions.

Which Way are the Estimates Headed?

The Zacks Consensus Estimates for Ball Corporation’s earnings per share is pegged at 73 cents for the September-end quarter, suggesting 30.3% year-over-year growth. The Zacks Consensus Estimate for total sales of $3.05 billion reflects year-over-year growth of 3.6% from the prior-year quarter reported tally.

Let’s see how things are shaping up for this announcement.

Factors at Play

Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products. The company focuses on pursuing cost-out programs, completing growth capital projects and commercializing on the inherent sustainability attributes of metal packaging. These efforts are expected to have bolstered the company’s margin in the to-be-reported quarter.

The Zacks Consensus Estimate for the Beverage packaging, South America segment’s net sales is pegged at $420 million, calling for year-over-year growth of 7.4%. The segment’s operating income is pinned at $78 million, suggesting year-over-year growth of 9.8%. Beer customers are preferring aluminum cans over glass packaging, and overall consumption of alcohol and non-alcoholic products has been on the rise. Thus, the segment is likely to have benefited from solid industry beverage-can demand in South America, particularly in Brazil during the July-September quarter.

The Zacks Consensus Estimate for the Beverage packaging, Europe segment’s sales is pinned at $714 million for the third quarter, reflecting year-on-year growth of 4.5%. Segment operating income is projected at $94 million, calling for an improvement of 12% year over year. Customers’ growing preferences for cans, as well as increased production in new lines in the company’s existing facilities, are anticipated to have aided the segment’s results during the period under consideration.

The Zacks Consensus Estimate for the Aerospace segment's revenues is pinned at $325 million for the quarter under review, reflecting year-over-year increase of about 14.8%. The segment’s operating income is projected at $36 million, suggesting year-over-year growth of 38.4%.Robust aerospace backlog is likely to have contributed to the segment’s top-line growth during the quarter.

The Beverage packaging North and Central America segment will likely report sales of $1,299 million, displaying a 5% year-over-year increase. Segment operating income is projected at $174 million, indicating year-over-year improvement of 13.7%. The segment is anticipated to have benefited from volume growth, net fixed cost savings, lower start-up costs and improved aluminum can-sheet availability.

Nonetheless, headwinds related to currency, higher freight rates are likely to have affected Ball Corporation’s performance in the third quarter.

Ball Corporation Price and EPS Surprise

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Ball Corporation this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Ball Corporation is -4.83%. This is because currently the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 69 cents and 73 cents, respectively.

Zacks Rank: Ball Corporation currently carries a Zacks Rank of 4 (Sell).

Price Performance

Shares of Ball Corporation have gained 64% in the past year, outperforming the industry's growth of 56.4%.

Stocks to Consider

Here are a few Industrial Products stocks which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Welbilt, Inc. (NYSE:WBT) has an Earnings ESP of +1.01% and currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intellicheck, Inc. (NYSE:IDN) , another Zacks #3 Ranked stock, has an Earnings ESP of +33.33%.

Sealed Air Corporation (NYSE:SEE) has an Earnings ESP of +2.40% and holds a Zacks Rank of 3, at present.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>