Shares of packaging company Crown Holdings (CCK 2.06%) fell as much as 21.2% in trading on Tuesday after the company reported fourth-quarter 2023 financial results. Shares were still down 12.9% at 3:15 p.m. ET.
Declining revenue hits Crown hard
Revenue for the quarter was $2.86 billion, down from $3.01 billion a year ago, including positive impact from foreign currency of $42 million and lower material costs passed on to customers of $145 million. Income from operations increased from $229 million to $259 million in the quarter.
Management said North America had 5% volume growth in beverages and Brazil volumes grew 2%.
NYSE: CCK
Key Data Points
As part of efficiency efforts, the company stopped operations in Batesville, Mississippi, and Decatur, Illinois, and moved operations in Vietnam from Ho Chi Minh City to Vung Tau where there's a high-speed plant. This is expected to improve Crown's operational efficiency and utilization rates for capital equipment.
Where investors were likely disappointed was earnings per share guidance of $5.80 to $6.20 per share, only a slight increase from $5.86 per share in 2023. Management said softness in cans and aerosols is expected to drive the relatively disappointing results.
Lower expectations and a value for investors
Growth may not be what investors hoped for, but Crown Holdings is trading for a reasonable value given the steady performance on the bottom line. Shares trade for slightly less than 13 times earnings and that's a fair value for a company that's likely to improve efficiency in 2024 and beyond.
