Crown Holdings beats Q3 estimates as beverage can demand holds up

Crown Holdings reported third quarter earnings per share of $2.39, ahead of the $2.26 analysts had expected, according to Benzinga. Revenue reached $3.71 billion, above the $3.48 billion forecast and up from $3.2 billion a year earlier, Benzinga reported. A year ago the company posted net income of $214.0 million and operating income of $423.0 million, according to Alphastreet.

Chairman, President and CEO Timothy J. Donahue said robust global beverage can volumes helped offset the majority of rising input cost pressures during the quarter. In the prior quarter, the company had pointed to higher freight, energy and industrial gas costs weighing on margins, Simply Wall St reported, while global beverage can volumes grew 5% year over year that quarter, with North American shipments up 5%, Europe up 7% and Asia up by double digits, according to AlCircle.

Crown Holdings has now beaten earnings estimates in each of its last two quarters, Alphastreet reported. The company narrowed its full year adjusted diluted earnings per share guidance to $8.35 to $8.45, from a prior range of $8.30 to $8.50 reported by Seeking Alpha, and kept adjusted free cash flow guidance at a minimum of $950 million. Fourth quarter adjusted diluted earnings per share guidance of $1.63 to $1.73 implies a step down from this quarter's result.

That beverage can demand is strong enough to absorb higher input costs points to resilient volumes in consumer packaged goods even as commodity and freight costs stay elevated across the packaging industry. Crown Holdings' narrowed full year guidance, with cash flow guidance left unchanged, suggests management views the cost pressure as manageable rather than worsening into year end. But the lower fourth quarter outlook signals that some of this quarter's strength may not carry through, making the combination of a beat now and steady full year guidance the more telling signal for the stock than the quarter's headline numbers alone.