What Happened?
Shares of metal packaging products manufacturer Crown Holdings (NYSE:CCK) jumped 8.1% in the pre-market session after the company reported decent fourth quarter results, with EPS exceeding Wall Street estimates and next-quarter guidance coming in well above analysts' expectations. Sales were in line, driven by higher global beverage can volumes and increased North American food can shipments. On the other hand, its EBITDA missed and its full-year EPS guidance was in line with Wall Street's estimates. Regardless, the company's financial position improved as it reduced net debt by $878 million and achieved a record free cash flow of $814 million. Overall, this was a good quarter.
After the initial pop the shares cooled down to $88.25, up 3.7% from previous close.
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What The Market Is Telling Us
Crown Holdings’s shares are not very volatile and have only had a move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 10% on the news that the company reported strong second-quarter earnings results. EPS came in ahead of expectations, though revenue missed by a narrow margin. The top line benefitted from "higher global beverage can shipments offset primarily by the pass through of $94 million in lower material costs and unfavorable foreign currency of $13 million." Adding to the positive aspect, free cash flow came in positive, and gross margin ticked up slightly. Overall, it was a strong quarter for the company, with ample reasons for investors to stay positive.
Crown Holdings is up 8.7% since the beginning of the year, but at $88.25 per share, it is still trading 9.7% below its 52-week high of $97.75 from October 2024. Investors who bought $1,000 worth of Crown Holdings’s shares 5 years ago would now be looking at an investment worth $1,109.
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