Ball’s Q3 Can Volume -9.9% in North and Central America; Can Manufacturer Closes, Delays and Calls Off Plants

Ball Corporation recorded a -9.9% volume decline for its North and Central America can business during the third quarter, the company reported today. Global shipments declined -3% in the quarter.

Although Ball management didn’t name Anheuser-Busch InBev’s Bud Light brand, the company pointed its overexposure to “the continuing U.S. mass beer brand disruption.”

The world’s largest can manufacturer reported Q3 operating earnings of $196 million on sales of $1.54 billion in North and Central America. That represented a decline from 2022’s reported Q3 earnings of $205 million on sales of $1.8 billion, which the company attributed to “lower shipments and the contractual pass through of lower aluminum costs favorably offset by incremental inflation recovery.”

Ball’s global Q3 net earnings were $203 million on sales of $3.57 billion, compared to net earnings of $392 million on sales of $3.95 billion in 2022.

Through the first nine months of 2023, Ball reported net earnings of $553 million on sales of $10.63 billion. That represented a decline from the $664 million generated on sales of $11.8 billion at the same time last year.

During a Q&A with analysts Thursday, Ball chairman and CEO Daniel W. Fisher said he believes Ball’s recovery will begin in Q2 2024.

“Second, third and fourth quarter will become easier comps for us,” he said. “The first quarter will be challenged because Bud Light in particular did well – Budweiser did well in the first quarter – but I don’t think we’re going to have to make any further network changes. I think we’re in a really good spot.”

Ball is again rationalizing its facility footprint, citing “North American supply demand has tightened up significantly,” and the company is “lowering costs” across its plant network, CFO Scott Morrison said during the call with analysts.

The company will cease operations at its leased facility in Kent, Washington and has called off plans to build a beverage can plant in North Las Vegas, which were previously delayed. Ball is also delaying plans to build a can plant in Concord, North Carolina, pushing those off until 2028.

“In North America, we further optimized our plant network to ensure proper supply/demand balance while continuing to enable access to high-quality, innovative aluminum beverage cans and bottles at a growth cadence appropriate for current market conditions and our customer mix,” Fisher said in a press release. “These actions and improved plant performance, in addition to deploying the aerospace sale proceeds to significantly reduce our leverage and increase share repurchases, serve as catalysts for higher shareholder returns.”

In the last two years, Ball has closed plants in Phoenix, Arizona; St. Paul, Minnesota; and Wallkill, New York.