Crown (NYSE:CCK) reported third-quarter 2026 adjusted diluted earnings per share of $2.39, up 7% from $2.24 a year earlier, as global beverage can shipment growth helped offset elevated costs tied primarily to the Middle East conflict.
Reported diluted earnings per share were $2.08, compared with $1.85 in the prior-year quarter. Net sales rose to $3.7 billion from $3.2 billion, reflecting higher global beverage can shipments and the pass-through of higher material costs, partly offset by $8 million of unfavorable foreign-currency translation.
“The company had another solid quarter of performance as continued strong global demand for beverage cans helped offset the majority of rising input costs,” Chairman, President and CEO Tim Donahue said on the company’s earnings call.
Global can volumes rise 6%
Global beverage can volumes increased more than 6% during the quarter, following 5% growth in each of the first two quarters of the year. Shipment growth included double-digit gains in Asia, 6% growth in North America and 4% growth in Europe.
Donahue said Crown continues to target full-year global beverage can volume growth of 4% to 5%. For the fourth quarter, however, the company expects global volume growth closer to 3.5% to 4%, rather than matching the third quarter’s 6% increase.
In the Americas Beverage segment, revenue rose 20%, driven in part by $240 million of higher-metal-cost pass-throughs and higher unit volumes. North American volumes grew 6%, while Brazil rose 4% and Mexico declined about 1%.
Donahue said North American beverage-can demand remains strong and that the company expects full-year shipments in the region to increase 3% to 4%. He added that Crown could be fully utilized in North America next year, which could constrain volume growth depending on available capacity.
Within North America, Donahue said energy drinks remained “exceptionally strong,” while carbonated soft drinks and sparkling water also performed well. Beer appeared to be stabilizing, he said, with declines relatively modest compared with recent periods.
European volumes increased 4%, with 7% growth across the continent partly offset by a 4% decline in the Gulf states. Segment income was level with the prior year as higher volumes were offset by inflation, product mix and startup costs. Crown expects to continue incurring startup costs in the fourth quarter and into the first quarter of 2027 as it brings new capacity online.
Asia-Pacific income increased on mid-double-digit volume gains in Southeast Asia, although higher energy and transportation costs remained a headwind. Donahue said Asia is expected to grow at a low- to mid-single-digit rate next year, rather than repeat this year’s double-digit growth.
Inflationary pressures weigh on segment income
Segment income totaled $484 million, down from $490 million in the prior-year period. Higher global beverage-can shipments were offset by inflationary cost pressures and weaker results in the Transit Packaging business.
The company said inflation associated primarily with the Middle East conflict reduced third-quarter segment income by approximately $17 million across its businesses and affected adjusted diluted earnings per share by $0.12. Crown included a similar impact in its fourth-quarter forecast.
Donahue said costs for energy, industrial gases and freight remain above pre-conflict levels. In North America and much of Europe, contractual look-back formulas are expected to allow the company to recover many of those non-metal cost increases in 2027. He said the recovery mechanisms are less extensive in Asia and the Middle East, where contracts are more commonly repriced annually.
While Crown had previously expected approximately $0.10 of inflation-related pressure during the second half, Donahue said the impact has risen to an estimated $0.20 to $0.25, split roughly evenly between the third and fourth quarters. The company expects continued volume declines in some Middle East operations during the fourth quarter unless restrictions around the Strait of Hormuz ease.
Transit Packaging fell short of Crown’s expectations, as soft volumes across product lines were compounded by higher freight costs. Donahue said quoting activity has increased in equipment markets and industrial demand has shown early signs of improvement, but the company remains cautious until quotations translate into firm orders. Crown expects fourth-quarter Transit Packaging results to show a similar year-over-year decline to the third quarter.
Cash flow outlook improves as working capital performs better
Adjusted free cash flow was $771 million through the first nine months of 2026, including capital expenditures of $310 million. Crown raised its full-year adjusted free-cash-flow outlook to at least $950 million from at least $900 million previously, with full-year capital spending projected at approximately $550 million.
Chief Financial Officer Kevin Clothier said the improved cash-flow outlook reflects stronger-than-expected working-capital performance rather than a change in the company’s earnings midpoint. Crown maintained the midpoint of its full-year adjusted EPS outlook while narrowing the range.
- Full-year adjusted diluted EPS is expected to be $8.35 to $8.45.
- Fourth-quarter adjusted diluted EPS is expected to be $1.63 to $1.73.
- Full-year adjusted net leverage is expected to be approximately 2.5 times.
- Net interest expense is projected at approximately $355 million, and the effective tax rate at approximately 25%.
During the third quarter, Crown repurchased $81 million of its shares. Year-to-date repurchases totaled $598 million, and the company also paid $115 million in dividends, bringing total shareholder returns for the first nine months to more than $700 million.
Donahue said Crown expects to continue emphasizing share repurchases absent investment opportunities that it believes would generate greater shareholder value. He said annual buybacks in a range of roughly $600 million to $800 million could be feasible over the next several years, subject to capital-allocation decisions and market conditions.
Expansion projects target growth in Europe, Brazil and India
Crown is investing in beverage-can capacity projects in Brazil, Spain and northern India, along with expansion work in Greece and a third line at its Peterborough, U.K., plant. Donahue said the European projects are intended to add needed capacity for customers as regional can demand grows.
The company also recently broke ground on its first beverage-can facility in India. Donahue said more than 90% of the two-line plant’s capacity is under contract, with approximately 60% tied to beer and at least 40% to soft drinks. He said Crown sees potential for additional facilities in India over time as customer demand develops across the country.
Donahue said demand at Crown’s beverage-can equipment business remains strong as can makers globally seek to expand capacity. He described the current market as a broad, organic growth period for beverage cans, supported by beverage growth and packaging-substrate shifts.
About Crown (NYSE:CCK)
Crown Holdings, Inc (NYSE: CCK) is a global packaging company that designs, manufactures and sells metal packaging products. Its portfolio includes beverage cans, food cans, aerosol cans, closures and other specialty packaging used by consumer goods, food and beverage, household, personal care and industrial customers.
The company serves customers across North America, Europe, Asia Pacific and other international markets. Crown’s products are used for beer, soft drinks, energy drinks, canned foods, household products, personal care items and industrial materials.
