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Can Crown Holdings (CCK) Pull a Surprise in Q2 Earnings?

Zacks

Crown Holdings, Inc. CCK, the supplier of packaging products, is scheduled to release second-quarter 2017 financial numbers, after the market closes on Jul 19.

In the last reported quarter, the company posted a positive earnings surprise of 2.86%. Notably, Crown Holdings surpassed the Zacks Consensus Estimate in three out of the last four quarters, resulting in an average surprise of 3.34%.

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

Crown Holdings, Inc. Price and EPS Surprise

Crown Holdings, Inc. Price and EPS Surprise | Crown Holdings, Inc. Quote


Factors at Play

For the second quarter, Crown Holdings projects its adjusted earnings per share in the range of $1.05–$1.15, the mid-point indicating an 8% drop year over year. The company’s performance will be hurt by dismal global food and aerosol can sales unit volumes due to lower consumer spending. Further, volatile aluminum and steel prices are expected to dent its results in the to-be-reported quarter.

However, the company is anticipated to gain from the geographic expansion of its beverage can lines. Crown Holdings’ consistent efforts to evaluate select growth opportunities through capacity additions in existing plants, new plants in existing markets and improvement in product lines will likely aid its results in the quarter to be reported.

Earnings Whispers

Our proven model does not conclusively show that Crown Holdings will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Crown Holdings has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.09. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Crown Holdings has a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Share Price Performance

Year to date, Crown Holdings has outperformed the Zacks classified Containers- Metal/ Glass sub-industry with respect to price performance. The stock gained around 13.45%, while the industry recorded growth of 12.34% over the same time frame.



Stocks to Consider

Here are some companies in the broader industrial products sector that have the right combination of elements to post an earnings beat this quarter:

AGCO Corporation AGCO, with an Earnings ESP of +0.97% and a Zacks Rank #1, is slated to release its quarterly numbers on Jul 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Belden Inc. BDC, with an Earnings ESP of +0.83% and a Zacks Rank #2, is scheduled to report its results on Aug 2.

Caterpillar Inc. CAT, with an Earnings ESP of +15.46% and a Zacks Rank #3, is slated to report quarterly numbers on Jul 25.

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