Ball works through capacity constraints

North and Central America numbers

Ball’s North and Central America segment generated $2 billion in second-quarter sales, up from $1.6 billion a year earlier. First-half sales for the region increased to $3.78 billion from $3 billion year over year.

The company said higher volume and favorable price/mix drove the sales increase, with higher aluminum prices accounting for much of that change.

Meanwhile, quarterly North and Central America segment earnings declined by $5 million year over year, hitting $207 million. Half-year earnings were unchanged at $412 million despite a year-over-year increase of more than $700 million in net sales over the period.

Ball said operating expenses and plant startup costs outweighed favorable price/mix, including the timing of metal cost pass-throughs.

Across all segments, Ball’s comparable operating earnings increased to $433 million in the second quarter from $402 million a year earlier, while first-half comparable operating earnings rose to $820 million from $754 million.

Those figures represented year-over-year increases of nearly 8% and 9%, respectively, compared with companywide net sales growth of roughly 20% and 18% over the same periods. By comparison, North and Central America segment comparable operating earnings declined more than 2% in the second quarter and were unchanged in the first half, despite regional net sales increasing about 24% and 23%, respectively.

On the earnings call, Chief Financial Officer Dan Rabbitt said the company incurred about $5 million in startup costs in the second quarter and still expects about $35 million in Millersburg startup costs for 2026, with about $30 million falling in the second half of 2026.

Volumes

North and Central America shipments increased by a low-single-digit percentage in the second quarter. Ball’s global aluminum packaging shipments grew 4.3% when Europe, the Middle East and Africa (EMEA) and South America are included.

Management said full-year North and Central America volume growth should remain near the low end of its 1% to 3% 2030 guidance range on the earnings call. Rabbitt noted energy drinks and non-alcoholic beverages as areas of demand in the region.

Nonetheless, management described the North American system as tight. Chief Executive Officer Ron Lewis said Ball did not receive meaningful incremental volume from America 250 or the World Cup because the network lacked much available capacity.

The company was able to serve customers, but Lewis said the system would remain constrained until Millersburg ramps.

Millersburg startup

Ball began producing commercial cans at Millersburg in July. The Pacific Northwest plant has one line and will produce standard size cans.

Ball expects the Millersburg plant to contribute close to its full production and earnings impact during 2027, potentially beginning in the first quarter, although Lewis stopped short of saying it would be fully ramped by the beginning of the 2027.

Aerosol

The earnings call also touched on Ball’s personal and home care business and a competitor’s Pennsylvania expansion.

The competitor was not named on the call, but it appears to refer to CCL Container, an aluminum aerosol can producer in Hermitage, Pa., that received state funding in July to support an expansion in Mercer County.

Rabbitt said the North American aerosol market effectively consists of the US and Mexico. Because Ball’s relevant aerosol operations are in Mexico, he said a competitor’s US expansion is less directly relevant to Ball than capacity additions in Mexico.

Rabbitt did note that volume in that business increased by a high-single-digit percentage during the quarter.