Crown Holdings Reports Q3 Adjusted EPS of $2.39, Raises Full-Year Outlook

Crown Holdings (NYSE: CCK ) reported third-quarter financial results on Tuesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Crown Holdings reported a strong third quarter with diluted earnings per share of $2.08, up from $1.85 in the previous year. Adjusted EPS increased by 7% to $2.39. Net sales rose to $3.7 billion, driven by higher global beverage can shipments and increased material costs, despite unfavorable foreign currency impacts. Global beverage can volumes grew over 6%, with notable growth in Asia, North America, and Europe, offset by inflationary pressures and lower transit packaging results.

Capital spending reached $310 million, with investments in Brazil, Spain, and Northern India. Share repurchases totaled $598 million year-to-date. The company projects full-year 2026 adjusted EPS of $8.35 to $8.45, with a strong balance sheet and cash flow positioning for continued investment and shareholder returns. Challenges included inflationary pressures from the Middle East conflict, impacting segment income by $17 million and adjusted EPS by $0.12.

Capacity expansion projects in Europe and Brazil are on track, with strong demand for cans and equipment supporting growth. Management remains confident in global beverage can demand, projecting full-year growth of 4% to 5% and continued strong demand in 2027. Full Transcript OPERATOR Good morning and welcome to Crown Holdings' third quarter 2026 conference call. Your lines have been placed on a listen-only mode until the question and answer session.

Please be advised that this conference is being recorded. I would now like to turn the call over to Mr. Kevin Clothier, Senior Vice President and Chief Financial Officer. Sir, you may begin.

Kevin Clothier (Senior Vice President and Chief Financial Officer) Thank you, Rich, and good morning. With me on today's call is Tim Donahue, Chairman, President and Chief Executive Officer. If you don't already have a copy of the earnings release, it is available on our website at crowncork.com. On this call, as in the earnings release, we will make a number of forward-looking statements.

Actual results could differ materially from those statements. Additional information concerning factors that could cause actual results to vary is contained in the press release and our SEC filings, including Form 10-K for 2025 and subsequent filings. Reported diluted earnings per share were $2.08 compared to $1.85 in the prior-year quarter. Adjusted earnings per diluted share were $2.39 compared to $2.24 in the third quarter of 2025, an increase of 7%.

Net sales increased to $3.7 billion compared to $3.2 billion in the prior-year quarter. The increase primarily reflected higher global beverage can shipments and the pass-through of higher material costs, partially offset by $8 million of unfavorable foreign currency translation. Global beverage can volumes increased more than 6%, including double-digit growth in Asia, 6% growth in North America, and 4% growth in Europe. Segment income was $484 million compared to $490 million in the prior-year quarter.

Higher global beverage can shipments were offset by inflationary cost pressures and lower results in transit packaging. Inflationary pressures from the Middle East conflict impacted third quarter segment income by approximately $17 million across all businesses and adjusted diluted earnings per share by $0.12. We have included a similar impact in our fourth quarter estimate. Adjusted free cash flow was $771 million through the first nine months of the year with capital spending of $310 million as we continue to invest in growth projects in Brazil, Spain, and Northern India.

Capital allocation remains an important component of our value-creation strategy. During the third quarter we repurchased $81 million of the company's shares, bringing year-to-date share repurchases to $598 million. Including $115 million of dividends, we returned more than $700 million to shareholders during the first nine months of 2026 while maintaining net leverage ratio at approximately 2.5 times. Based on our strong year-to-date performance, we expect full-year 2026 adjusted diluted earnings per share to be in the range of $8.35 to $8.45 and the fourth quarter adjusted diluted earnings per share to be in the range of $1.63 to $1.73.

Our full-year outlook assumes net interest expense of approximately $355 million; exchange rates at current levels, including a euro/dollar at approximately $1.12; effective tax rate of approximately 25%; depreciation of approximately $325 million; noncontrolling interest expense of approximately $145 million; dividends to noncontrolling interest of approximately $110 million; adjusted free cash flow of at least $950 million; capital spending approximately $550 million; and year-end adjusted net leverage of approximately 2.5 times. The company is executing well and delivered another strong quarter.

As we look ahead, our strong balance sheet, consistent free cash flow generation, and disciplined capital allocation strategy position us well to continue to invest in attractive organic growth opportunities while returning capital to shareholders. With that, I'll turn the call over to Tim. Tim Donahue (Chairman, President and Chief Executive Officer) Thank you, Kevin, and good morning to everyone. As Kevin just summarized, the company had another solid quarter of performance as continued strong global demand for beverage cans helped offset the majority of rising input costs.

Global beverage can shipments advanced 6% in the quarter following 5% growth in both the first and second quarters, with year-to-date growth standing at close to 6%. We remain confident in the outlook for beverage can demand with our full-year global growth target in the 4% to 5% range. The company's businesses are responding well to global economic challenges to continue supporting our customers' needs as we all navigate a world of growing tensions. As Kevin described, inflationary headwinds, primarily a result of the Middle East conflict, were greater in the third quarter than previously anticipated and we have included a similar headwind in our fourth quarter estimate.

Energy, industrial gases, freight, among other costs all remain elevated from pre-conflict levels and, as many of you are aware, the contractual recovery of these and other non-metal costs will occur in 2027 via a look-back formula. Revenues in the Americas Beverage segment advanced 20% in the quarter, primarily a result of $240 million in the pass-through of higher metal costs and higher sales unit volumes. Volumes in North America grew 6%, Brazil was up 4%, with Mexico down about 1% in the quarter against a strong prior-year comp.

Income improved in the quarter on the back of contribution from volume gains, although the majority of the volume contribution was offset by rising input costs. Adjusting for the pass-through of higher material costs, segment income margin was 17.7% of sales in the quarter. Can demand remains strong in North America and we expect full-year shipments to be up in the 3% to 4% range. European volumes increased 4% in the third quarter, with 7% growth recorded across the continent, offset by a 4% reduction in the Gulf States.

Capacity expansion projects in Greece and Spain remain on plan and we are also installing a third line to the Peterborough, UK plant. These capacity additions will bring much-needed capacity to our system, helping to serve our customers' growing needs. Income level to the prior year reflects higher volumes offset by rising input and startup costs. Income in Asia Pacific advanced during the quarter on the back of mid double-digit Southeast Asian volume gains, helping to offset higher energy and transport costs.

Performance across the transit packaging business disappointed in the third quarter with both volumes and profits falling short of prior expectations. Soft volumes across all product offerings were compounded by higher input costs, notably freight. While we do see some green shoots, we remain cautious until increased quoting activity results in firm orders. Strong vegetable and pet food demand contributed to high single-digit volume gains in North American food, offsetting softer aerosol can sales.

And activity across our beverage can equipment business remains strong as global beverage can makers look to increase their capacity to meet a world of continuing growing can demand. To summarize, before opening the call to questions: Global beverage can volumes advanced 6% in the quarter. Full-year growth now estimated at 4% to 5%. Earnings per share advanced 7%, up 11% through nine months.

Cash flow remains robust and, as Kevin described, the company has now returned more than $700 million to shareholders year to date. The balance sheet remains strong with leverage remaining unchanged at 2.5 times through the peak summer selling season. And with that, Rich, we are now ready to take questions. Thank you.

OPERATOR Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by the number one. Please unmute your phone and record your name clearly when prompted.

Your name is required to introduce your question, and to withdraw your request you may press star two. One moment please for the first question. Our first question is from George Tavas from Bank of America. Your line is now open.

George Tavas (Analyst at Bank of America) Thank you. Hi everyone. Good morning. Thanks for the details.

Tim, I wanted to ask a question maybe with a couple of parts trying to get at the fourth quarter. So can you talk about what sort of exit rate you're seeing on volumes from the third quarter into the fourth quarter for your key regions? And, relatedly—and again trying to get at the fourth quarter—and you said most of this is the elevated level of inflation, with inflation being higher than expected, what's the offset such that your free cash flow is actually going up? You would think that with inflation being a bigger burden, understandably, that the free cash flow guide would have been lower, but it's higher.

So help us understand what's going on: volume in the fourth quarter as you're entering and how you're offsetting the inflation such that free cash flow's up. And then I had a quick follow-on. Tim Donahue (Chairman, President and Chief Executive Officer) Okay, so very quickly, I'll let Kevin deal with the cash flow element. We've got two things in our fourth quarter estimate.

One, as Kevin described, if we had previously told you that we expected inflation to be about a 10-cent headwind in the back half of the year, it's probably a little bit more than double that, split equally between third and fourth quarter. So we've got another, what, Kevin, $0.13 baked into our estimate for the fourth quarter. The way we're able to offset that, at least in the third quarter, was exceptionally high volume. As you know, contribution from more volume can cover a lot of costs and other problems.

As you describe, exit rates coming into the fourth quarter still fairly strong. You know, it's hard for us to sit here, though, and anticipate that we're going to have 6% global volume growth in the fourth quarter. So, you know, our estimate for the fourth quarter probably on the order of 3.5% to 4% global volume growth, which, historically speaking—George, you've been around a long time like I have. I always say that it helps to have you around because I don't feel so old.

George Tavas (Analyst at Bank of America) But watch it, too. Tim Donahue (Chairman, President and Chief Executive Officer) 3% to 4%. Historically, you know, in the can business we would all do backflips if we could do that every quarter. It's just not the 6% we had in the third quarter, but 3% to 4%, maybe a little bit better than that, we're quite happy.

So continued elevated costs, continued volume growth—although hard to sit here today with an estimate to give you to think that while we're going to have volume growth, it could be as strong as the third quarter. Still have volume growth, maybe a touch lighter. And I'll let Kevin deal with the inflation vis-à-vis cash flow. George Tavas (Analyst at Bank of America) Yeah, we were just trying to see that there wasn't something that had now become negative.

But I appreciate that, Tim. Keep going. Hey, Kevin. Kevin Clothier (Senior Vice President and Chief Financial Officer) Hey, George.

Yeah, George, I mean, think about it—look, the guide, the midpoint of the guide, is still exactly where it was at the end of the second quarter. So even though we've had higher inflationary pressures, we basically offset it with volume here. And that's the expectation, because we've maintained the midpoint; we just narrowed the range. And then the delta to get the cash flow higher is just working capital—is just running better than it ever has.

So we expect working capital to be better than what we originally expected, and that's why we feel we can get at least $950 out versus at least $900. So. Tim Donahue (Chairman, President and Chief Executive Officer) Okay, George, I just want to—one last thing I'll talk about, because Kevin talked about working capital. We have two primary metrics whereby our managers are compensated in their bonus: economic profit and cash flow.

And people will perform based on how you compensate them. They are well aware of how they're compensated and they work to generate as much cash as possible. So it's just a function of a compensation program that we've had for more than almost two decades that works quite well. George Tavas (Analyst at Bank of America) Understood, Tim.

You know, I'll turn it over, to be fair. And it's tenure—it's not age. Anyway, thanks. Tim Donahue (Chairman, President and Chief Executive Officer) Rich, next question.

OPERATOR Thank you. Our next question is from Matt Roberts from Raymond James. Your line is now open. Matt Roberts (Analyst at Raymond James) Hey, Tim.

Kevin. Tom, good morning. I'm at volume strength. So North America 3Q really strong and actually better than 2Q despite World Cup benefit last quarter.

So in hindsight, is the strength in 2Q still due to World Cup, whereas North America is generally stronger given it carried through into 3Q? Any timing or spot volume considerations in second half here? And given those strong underlying trends despite harder comps in '27, any early indications on what we could expect for North America in '27? Tim Donahue (Chairman, President and Chief Executive Officer) Well, the first thing I'll answer is Q3.

You know, the comp last year, Q3, was very high. As you say, we had a very strong Q3 in earnings terms. Would have liked it to have been better given the volume growth. But I think what you don't see is that, although we've talked about it before, we had positive volume momentum in Brazil in the third quarter, whereby in the second quarter I think we had negative volume momentum.

So Brazil was a little bit of a turnaround, I don't believe. Although we had 4% growth in Brazil in the third quarter, I think the industry probably did better than that. We're still running behind the industry a bit in Brazil, given customer mix. But our third quarter in Brazil was stronger than our second quarter in Brazil.

And that's the reason why you might be referencing that Q3 was better than Q2. You know, a little early to say what 2027 is going to look like. I hesitate to say this, but it feels like we're going to be full next year in North America. You know, the upshot of that is that we won't have a lot of spare capacity.

So we'll see how it progresses from here until the next time we talk to you. Matt Roberts (Analyst at Raymond James) Thanks, Tim. And on Europe, another strong growth there on volume. Segment income was flat.

Was that really all the inflation impact, or any impact from startup costs? Tim Donahue (Chairman, President and Chief Executive Officer) You've got startup costs, Kevin? I don't know, maybe $4 or $5 million or something like that. I think the other thing you have is on the continent we were up 7%, and in the Gulf states, that is the Middle East, we were down 4%.

And so you've got some mix issues. But again, given everything that's going on in Europe, we're not disappointed with that result. Matt Roberts (Analyst at Raymond James) Right, right. And with the startup costs, is there any way 4Q operating income could be up, or should we have more startup in 4Q, or any considerations there?

Tim Donahue (Chairman, President and Chief Executive Officer) I think we're going to continue to have startup costs and that's already baked into the fourth quarter estimate. And we'll even have a little bit of startup cost in the first quarter. That's right. We've got enough projects going on right now.

Between the three projects in Europe, we've got a project in Brazil. And you know, as I mentioned to you in the prepared remarks, our equipment business, the order book is really firm and it's not just a North America or European thing. It is a global growth spurt right now we're experiencing across beverage cans. It feels a little bit like pre-COVID.

Although this feels a bit more organic, it's not fueled by COVID. This feels like there's a real momentum globally towards beverage cans, either from the growth of beverages and/or substrate changes globally. So this feels really positive as we look forward. Matt Roberts (Analyst at Raymond James) Very good.

Appreciate that. Tim Donahue (Chairman, President and Chief Executive Officer) Thank you. OPERATOR Thank you, Matt. Thank you.

Our next question is from the line of Ghansham Panjabi from Baird. Your line is now open. Ghansham Panjabi (Analyst at Baird) Thank you, operator.