Shares of Crown Holdings Inc. (NYSE: CCK) fell over 2% in the extended session on Monday following lower-than-expected sales in the second quarter. The packaging manufacturer attributed this decline to inflation and challenging economic conditions, which negatively impacted volumes across most of its business segments.
In Q2, Crown Holdings reported earnings of $157 million, or $1.31 per share, compared to $295 million, or $2.43 per share, in the same period last year. Adjusted earnings per share came in at $1.68. Meanwhile, total sales declined from $3.5 billion a year ago to $3.1 billion.
However, the company noted that its Americas Beverage segment showed higher beverage-can volumes during this time. Analysts had expected Crown Holdings to report adjusted EPS of $1.63 on sales of $3.5 billion, according to a FactSet poll.
Despite the challenges, Crown Holdings remains optimistic about the future. CEO Timothy Donahue stated, “Cumulative inflationary effects and challenging macroeconomic conditions in certain markets continue to adversely impact volumes.” He also expressed confidence in increased shipments of beverage cans in the second half of the year, particularly in North America, as retail promotional activity for carbonated soft drinks is expected to pick up.
Crown Holdings emphasized the enduring popularity of beverage cans as a preferred packaging option for customers and consumers alike. The company is nearing the completion of its plan to expand beverage-can production capacity. As a result, capital expenditures are projected to be significantly reduced next year and in 2025.
With the anticipated boost in cash flow, Crown Holdings plans to prioritize debt reduction and returning capital to its shareholders.
