Ball Corp. (BLL, Financial) filed Quarterly Report for the period ended 2010-06-27.
Ball Corp. has a market cap of $5.42 billion; its shares were traded at around $58.68 with a P/E ratio of 13.7 and P/S ratio of 0.7. The dividend yield of Ball Corp. stocks is 0.7%. Ball Corp. had an annual average earning growth of 12.2% over the past 10 years. GuruFocus rated Ball Corp. the business predictability rank of 5-star.BLL is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Pioneer Investments, Steven Cohen of SAC Capital Advisors, David Dreman of Dreman Value Management.
Segment earnings in the second quarter and first six months of 2010 were $39.7 million and $67.5 million higher, respectively, than in the same periods of 2009. For the second quarter of 2010 the increase in earnings was primarily due to a net $23 million impact related to the higher sales volumes, a net margin increase of $19 million due primarily to favorable metal costs in both regions, lower costs as a result of past business consolidation activities and inventory holding losses experienced in the second quarter of 2009. For the first six months of 2010, the increase in earnings was primarily due to a net $44 million impact related to the higher volumes, a net margin increase of $27 million due to favorable metal costs in Asia and inventory holding losses experienced in the second quarter of 2009.
Segment earnings in the second quarter and first six months of 2010 decreased by $1.7 million and $29.6 million, respectively, as compared to the same periods in the prior year. For the second quarter of 2010 earnings decreased primarily due to lower inventory costs in 2009, partially offset by improved 2010 sales volumes and mix of $7 million. For the first six months of 2010 earnings decreased primarily due to lower inventory costs in 2009 partially offset by improved manufacturing performance of $10 million and improved sales volumes and mix of $8 million in 2010.
Selling, general and administrative (SG&A) expenses were $77.6 million in the second quarter of 2010 compared to $72.9 million for the second quarter of 2009 and $156.9 million in the first six months of 2010 compared to $141.9 million for the first six months of 2009. The increase in SG&A expenses in the second quarter of 2010 was primarily due to higher employee compensation costs of approximately $5 million and other individually insignificant cost increases of $9 million, partially offset by favorable foreign exchange effects of $6 million and lower bad debt expense of $3 million. The increase in SG&A expenses in the first six months of 2010 was primarily due to higher employee compensation costs of approximately $8 million and other individually insignificant cost increases of $15 million, partially offset by favorable foreign exchange effects of $4 million and lower bad debts of $4 million.
Consolidated interest expense was $44.7 million and $78.6 million for the second quarter and first six months of 2010, respectively, compared to $24.7 million and $50.5 million for the same periods of 2009, respectively. The second quarter and first six months included $8.1 million for the call premium and write off of unamortized financing costs and unamortized issuance premiums related to the redemption of Ball s senior notes due December 2012. The higher expense in 2010 was also due to higher levels of debt, including the issuance of $700 million in senior notes in August 2009.
The effective income tax rate for earnings from continuing operations was 29.6 percent for the first six months of 2010 compared to 27.8 percent for the first six months of 2009. The tax rate in 2010 included a release of a tax reserve of $3 million and the accrual of a net $8 million tax benefit due to a change in the tax status of a foreign investment. The tax rate in 2009 included a $4.8 million release of a tax reserve for uncertain tax positions as the result of a foreign tax settlement, the $6.8 million release of a valuation allowance for a net operating loss carryforward and a $9.6 million tax benefit from the sale of shares in a stock investment due to a higher tax basis. The full-year effective income tax rate for 2010 is expected to be approximately 33 percent.
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Ball Corp. has a market cap of $5.42 billion; its shares were traded at around $58.68 with a P/E ratio of 13.7 and P/S ratio of 0.7. The dividend yield of Ball Corp. stocks is 0.7%. Ball Corp. had an annual average earning growth of 12.2% over the past 10 years. GuruFocus rated Ball Corp. the business predictability rank of 5-star.BLL is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Pioneer Investments, Steven Cohen of SAC Capital Advisors, David Dreman of Dreman Value Management.
Highlight of Business Operations:
For the second quarter of 2010, we reported net earnings from continuing operations of $144.6 million on sales of $2.0 billion, compared to $134.9 million on sales of $1.7 billion in the second quarter of 2009. Net earnings from continuing operations for the first six months of 2010 were $227.0 million on sales of $3.6 billion, compared to $201.5 million on sales of $3.2 billion in the first six months of 2009. Higher sales in 2010 were due largely to increasing volumes in all of our packaging business and the impact of the acquisition late last year of four U.S. metal beverage packaging plants.Segment earnings in the second quarter and first six months of 2010 were $39.7 million and $67.5 million higher, respectively, than in the same periods of 2009. For the second quarter of 2010 the increase in earnings was primarily due to a net $23 million impact related to the higher sales volumes, a net margin increase of $19 million due primarily to favorable metal costs in both regions, lower costs as a result of past business consolidation activities and inventory holding losses experienced in the second quarter of 2009. For the first six months of 2010, the increase in earnings was primarily due to a net $44 million impact related to the higher volumes, a net margin increase of $27 million due to favorable metal costs in Asia and inventory holding losses experienced in the second quarter of 2009.
Segment earnings in the second quarter and first six months of 2010 decreased by $1.7 million and $29.6 million, respectively, as compared to the same periods in the prior year. For the second quarter of 2010 earnings decreased primarily due to lower inventory costs in 2009, partially offset by improved 2010 sales volumes and mix of $7 million. For the first six months of 2010 earnings decreased primarily due to lower inventory costs in 2009 partially offset by improved manufacturing performance of $10 million and improved sales volumes and mix of $8 million in 2010.
Selling, general and administrative (SG&A) expenses were $77.6 million in the second quarter of 2010 compared to $72.9 million for the second quarter of 2009 and $156.9 million in the first six months of 2010 compared to $141.9 million for the first six months of 2009. The increase in SG&A expenses in the second quarter of 2010 was primarily due to higher employee compensation costs of approximately $5 million and other individually insignificant cost increases of $9 million, partially offset by favorable foreign exchange effects of $6 million and lower bad debt expense of $3 million. The increase in SG&A expenses in the first six months of 2010 was primarily due to higher employee compensation costs of approximately $8 million and other individually insignificant cost increases of $15 million, partially offset by favorable foreign exchange effects of $4 million and lower bad debts of $4 million.
Consolidated interest expense was $44.7 million and $78.6 million for the second quarter and first six months of 2010, respectively, compared to $24.7 million and $50.5 million for the same periods of 2009, respectively. The second quarter and first six months included $8.1 million for the call premium and write off of unamortized financing costs and unamortized issuance premiums related to the redemption of Ball s senior notes due December 2012. The higher expense in 2010 was also due to higher levels of debt, including the issuance of $700 million in senior notes in August 2009.
The effective income tax rate for earnings from continuing operations was 29.6 percent for the first six months of 2010 compared to 27.8 percent for the first six months of 2009. The tax rate in 2010 included a release of a tax reserve of $3 million and the accrual of a net $8 million tax benefit due to a change in the tax status of a foreign investment. The tax rate in 2009 included a $4.8 million release of a tax reserve for uncertain tax positions as the result of a foreign tax settlement, the $6.8 million release of a valuation allowance for a net operating loss carryforward and a $9.6 million tax benefit from the sale of shares in a stock investment due to a higher tax basis. The full-year effective income tax rate for 2010 is expected to be approximately 33 percent.
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