Crown Holdings (CCK, Financial), a leading aluminum beverage can manufacturer, has reached new one-year highs after a robust Q3 performance. The company reported strong demand in the U.S., supplying major brands like Coca-Cola (KO, Financial), PepsiCo (PEP, Financial), Anheuser-Busch InBev (BUD, Financial), and Molson Coors (TAP, Financial). This performance provides insights into potential outcomes for these companies' upcoming quarterly reports.
- CCK's global beverage shipments rose by 5% year-over-year in Q3, driven by growth in key markets like Brazil, Europe, Mexico, and the U.S., each recording at least a 5% increase. This offset lower volumes in other segments, leading to a 0.2% revenue increase to $3.07 billion, breaking a streak of year-over-year declines.
- Segment income grew by 10% year-over-year, contributing to CCK's second consecutive double-digit earnings beat, with a 15% increase in earnings to $1.99 per share. Management credited this to improved manufacturing efficiency and reduced spoilage, alongside successful execution of a capacity reduction program in Asia.
- The Asia Pacific region, however, saw an 11% decline in unit volume sales, particularly in Transit Packaging, with conditions expected to remain challenging through the year-end. This has kept CCK's FY24 outlook cautious.
- CCK raised its FY24 adjusted EPS guidance to $6.25-$6.35 from $6.00-$6.25, primarily due to Q3's upside. For Q4, earnings are expected to align with current forecasts.
Despite initial concerns following PepsiCo's (PEP, Financial) flat Q3 results and a 3% decline in North American beverage volumes, CCK's diverse customer base mitigated these effects. This trend mirrors last quarter's results, where CCK and competitors like KO and Keurig Dr Pepper (KDP, Financial) reported growth despite PEP's volume decline.
Overall, Crown Holdings' strong position in the global aluminum beverage can market and its diverse customer portfolio suggest potential for continued growth.
