Ball Accelerates Sales Growth as Margins Narrow
Second-quarter sales reached $4.00 billion as global packaging shipments rebounded.
Ball Corporation (BALL), the aluminum-packaging maker, posted faster second-quarter sales growth as recovering shipment volumes lifted revenue, though earnings and margins failed to keep pace.
Sales growth accelerated to 19.7% from roughly 16% in each of the previous two quarters. Global aluminum-packaging shipments rose 4.3%, rebounding from 0.8% growth in the first quarter while remaining below the fourth quarter’s 6.0% pace.
Revenue rose from $3.34 billion a year earlier and increased about 11% from the first quarter. Comparable diluted earnings rose 14.4% to $1.03 a share, slowing from 22.1% growth in the prior quarter, while comparable operating earnings increased 7.7% to $433 million.
That gap compressed Ball’s comparable operating margin to about 10.8% from 12.0% a year earlier. The margin was essentially unchanged from the first quarter, when sales growth also outpaced operating-earnings growth.
North and Central America accounted for much of the pressure. Sales climbed 24.4% to $2.01 billion, while comparable operating earnings fell 2.4% to $207 million as operating and plant-start-up costs outweighed higher low-single-digit volume and favorable price and mix. The segment’s margin fell to about 10.3% from 13.1% a year earlier and 11.5% in the first quarter.
South America provided the strongest offset, with mid-teen volume growth helping sales rise 23.9% to $591 million and comparable operating earnings jump 64% to $82 million. Its margin expanded to about 13.9% from 10.5%. In EMEA, operating earnings increased 6.6% on a 10.6% sales gain, with both measures slowing from the first quarter.
Ball reiterated its 2026 outlook for comparable diluted EPS growth of at least 10% and free cash flow above $900 million, leaving the targets unchanged from the prior two quarterly releases.
Business-consolidation and other charges doubled sequentially to $22 million, primarily reflecting tariff-contingency expenses the company is seeking to recover and costs tied to previously announced facility closures. Net debt rose to $6.73 billion at June 30 from $5.80 billion at year-end, lifting leverage to 3.16 times comparable EBITDA even as interest coverage improved modestly.