The European operations of Crown Holdings (NYSE: CCK) continue to expand, boosting the margins of the metal packaging manufacturer, known for providing cans to carbonated drink and beer companies.
Shipments in Europe rose by 12% during the third quarter, with operations providing a 27% jump in income during the summer months as consumers traveled to the region for their vacations. Crown has also made some investments in the area to improve efficiency, including brand new can lines for its Greek operations and conducting modernization improvements to its plants in Brazil and Germany.
The company reported some “softness in Asia and Latin America” that offset the “double-digit advances in Europe and the Middle East,” said CEO Timothy Donahue.
But the company estimates that operations in Europe should generate growth of 4% to 5% annually, as demand for more canned drinks and various other products is also anticipated to rise.
“We expect Europe to be very firm in the fourth quarter,” he said during the company’s earnings call.
Operations are diversified
Known for providing cans for vegetables, cookies, and beverages, Tampa, Florida-based Crown is widely diversified among various industries and includes companies in the pet food, personal care and household, and luxury products, such as aerosol containers, cosmetics, and fragrances.
Crown’s customers are often popular household names, such as Coke, Pepsi, Heineken, WD-40, and Barbasol.
Operating out of 189 facilities in 39 countries, Crown does face some risk from geopolitical concerns such as tariffs imposed by the U.S. government. The volume of purchases in Mexico and Brazil fell by 15% due to less spending from consumers as tariffs impacted prices, CFO Kevin Clothier said during the company’s conference call. A severe winter in Brazil contributed to fewer beers being sold by Heineken.
“We have seen limited direct impact from tariffs and remain attentive to the indirect effects that tariffs have had on the global consumer and industrial demand,” he said during the call.
Since Crown uses aluminum to manufacture cans, the additional costs were passed through to its customers, which rose 54% in the last 10 months, but the company’s absolute margins were not impacted, Donahue said.
Crown is predicting that business will grow in 2026 despite a weaker economy, as some consumers have cut back on some food and household goods staples.
Volumes will increase next year because the company is relying on “the experience that the consumer has with affordable pleasures in a challenging environment,” he said. “It shows the strength of the can, and it shows the strength of our industry.”
Over the past year, Crown’s stock moved up only by 6.4%, but in the past month, the stock has popped, rising by 11%.
The company, valued at an $11.6 billion market cap, is performing better than its competitors, rising 23% year-to-date, while Ball (NYSE: BALL) has seen a drop of 13.2% and Silgan (NYSE: SLGN) has experienced a 23.7% slide.
Crown’s management has confidence in the future of the company, repurchasing $314 million in its shares through the third quarter.
“When combined with dividends, we’ve returned more than $400 million to shareholders this year,” Clothier said.
Crown upgraded its estimates of the company’s 2025 full-year earnings guidance by 12% and also raised its free cash flow by 25% to $1 billion.
The company’s high-profile customers, such as Coke and Heineken, substantial cash flow, and expectations of continued growth make Crown an attractive stock.
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