Crown Holdings, Inc. (NYSE:CCK) Q2 2022 Earnings Conference Call July 21, 2022 9:00 AM ET

Company Participants

Tim Donahue - President & Chief Executive Officer

Kevin Clothier - Senior Vice President & Chief Financial Officer

Conference Call Participants

Chris Parkinson - Mizuho

George Staphos - Bank of America

Mike Leithead - Barclays

Phil Ng - Jefferies

Ghansham Panjabi - Baird

Mick Roxland - Truist Securities

Angel Castillo - Morgan Stanley

Arun Viswanathan - RBC Capital Markets

Anojja Shah - BMO Capital Markets

Kyle White - Deutsche Bank

Adam Josephson - KeyBanc

Operator

Good morning, and welcome to Crown Holdings Second Quarter 2022 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

Thank you, Nicole, and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. If you do not already have the earnings release, it is available on our website at crowncork.com. On this call, as in the earnings release, we will be making a number of forward-looking statements. Actual results could vary materially from such statements. Additional information concerning factors that could cause actual results to vary are contained in the press release and in SEC -- in our SEC filings, including our Form 10-K for 2021 and subsequent filings.

The company recorded diluted earnings per share in the quarter of $2.43, compared to $0.95 in the prior year quarter. Adjusted earnings per share in the quarter were $2.10, compared to $2.14 in 2021. The second quarter of 2021 included $0.30 per share related to the discontinued European food operations, net of the interest savings, share buybacks and equity earnings from our remaining 20% stake.

Net sales in the quarter were up 23% from the prior year, primarily due to the pass through of higher raw material costs and increased beverage can volumes. Segment income was $432 million in the quarter, compared to $395 million in the prior year, primarily due to improved profitability in the North American tinplate and can-making equipment businesses, and 4% Global beverage volume growth.

As of June 30, we have repurchased $600 million of Crown common stock under the current $3 billion board authorization. For the balance of the year, we assume that headwinds from a stronger US dollar and higher European energy prices will persist. We are forecasting a full year average euro-dollar rate of $105 million, which assumes euro dollar parity for the balance of the year. This compares to an average euro rate of $118 million in 2021. Using the euro as a proxy for all currencies where we operate globally, each $0.01 move in the euro-dollar rate equates to $0.02 per diluted share. We now estimate energy costs to be up $45 million for the year with the bulk of the increase in the second half.