Packaging maker Crown Holdings' sales drop as inflation, 'challenging' economic conditions hurt business

Shares of Crown Holdings Inc. (CCK) dropped more than 2% in the extended session Monday after the packaging maker missed expectations for its second-quarter sales, saying that inflation and economic conditions continued to hurt volumes. Crown Holdings earned $157 million, or $1.31 a share, in the quarter, compared with $295 million, or $2.43 a share, in the second quarter of 2022. Adjusted for one-time items, the company earned $1.68 a share. Sales dropped to $3.1 billion, from $3.5 billion a year ago, in part thanks to lower volumes across most of its business except its Americas Beverage segment. That segment saw higher beverage-can volumes, the company said. Analysts polled by FactSet expected adjusted EPS of $1.63 on sales of $3.5 billion. "Cumulative inflationary effects and challenging macroeconomic conditions in certain markets continue to adversely impact volumes," Chief Executive Timothy Donahue said in a statement. The company expects higher shipments of beverage cans in the second half of the year in North America, however, "as retail promotional activity, while still somewhat limited, is expected for carbonated soft drinks." Beverage cans remain "the preferred packaging option for customers and consumers alike," Crown Holdings said. The company is near the end of its push to expand beverage-can production capacity, and capital expenditures are seen "significantly reduced" next year and in 2025, with the company planning to use the increased cash flow to pay down debt and return capital to shareholders, it said.

-Claudia Assis

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07-24-23 1725ET

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