DOW JONES NEWSWIRES
Crown Holdings Inc.'s (CCK) second-quarter profit rose 6.1% as
selling, general and administrative expenses shrank.
The can manufacturer's earnings topped Wall Street's
expectations but the revenue fell short.
Demand for Crown's products has held up well in the U.S. as more
cash-strapped consumers turn to packaged foods they eat at home.
And metal containers remain a growing business in many parts of the
world.
In May, Crown offered $400 million in senior notes and used some
of the proceeds to reduce its high debt level, which resulted in
credit ratings upgrades from two major rating agencies.
The 117-year-old Crown reported profit of $105 million, or 65
cents a share, up from $99 million, or 61 cents a share, a year
earlier.
The latest results included a $1 million restructuring charge,
net of asset sale gains. The prior-year results included a $2
million pretax gain on asset sales and a $1 million pretax
restructuring charge.
Revenue slid 6.4% to $2.06 billion.
Analysts' estimates were for per-share earnings of 63 cents on
revenue of $2.09 billion, according to a poll by Thomson
Reuters.
Global beverage can sales unit volumes rose 2%, driven by
business in developing markets, but the increase was offset by the
effect of foreign-currency exchange and the pass through of lower
aluminum costs. Beverage can volumes were flat in the U.S.
Gross margin rose to 16.2% from 16% on beverage can unit volume
growth and cost cutting partially offset by the effect of
foreign-currency exchange and higher pension costs.
Selling, general and administrative costs fell 14% to $90
million, reflecting primarily the effects of currency
translation.
Net sales fell in every segment except North America food, where
they rose 14%. Earnings were flat in the Americas beverage segment
but grew in all others except European specialty packaging, which
dropped 27%.
In 2008, 47% of Crown's sales were from beverage cans, 34% from
food cans, and the rest from aerosol and specialty containers. Last
year, sales in western Europe provided 42% of Crown's revenue with
another 25% from emerging markets, including the Middle East and
Asia.
Crown's shares were at $23.82, down 0.1%, in after-hours
trading. The stock has lost about 11% of its value in the past year
but is up 78% from a four-year low in November.
- By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com