Crown Holdings Inc. (NYSE:CCK) Q4 2018 Earnings Conference Call Transcript
Feb 07, 2019 • 09:00 am ET
Good morning and welcome to the Crown Holdings Fourth Quarter 2018 Conference Call. Your lines have been placed in 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. Thomas Kelly, Senior Vice President and Chief Financial Officer. Sir, you may begin.
Thomas A. Kelly
Thank you, Eric and good morning. With me on today's call is Tim Donahue, President and Chief Executive Officer. 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 is contained in the press release and in our SEC filings including our Form 10-K for 2017 and subsequent filings.
Earnings for the quarter were $0.40 per share compared to a loss of $0.67 in the prior year quarter. Comparable earnings per share were $1 in the quarter versus $0.84 in 2017.
Net sales grew 26% in 2018 versus 2017, primarily due to the acquisition of the Transit Packaging business. Increased beverage can volumes and the pass-through of higher material costs were offset by lower food can volumes and currency translation. Segment income in the quarter improved primarily due to the Signode acquisition, as higher global beverage can volumes were offset by lower European food can volumes and start-up costs at the two new beverage can plants in Europe.
Adjusted free cash flow of $636 million was a bit ahead of our guidance of $625 million. Year-end pro forma net leverage of 4.6 times as shown in the release was consistent with our guidance and we expect the ratio to decline by about half a turn each year going forward, as we use cash flows to delever.
As outlined in the release, we estimate the first quarter 2019 adjusted earnings of between $1 per share and $1.10 per share and full year adjusted earnings of between $5.20 per share and $5.40 per share at current exchange rates. These estimates include a headwind of approximately $53 million or 32% per share after tax and pension expense reported below income from operations, largely due to a decline in pension assets and an increase in discount rates compared to the prior year. These estimates also assume a full year tax rate of between 25% and 26%. We currently estimate 2019 full year adjusted free cash flow of approximately $775 million with between $400 million and $425 million in capital spending. We expect cash pension contributions in line with our 2018 contributions of $20 million.
With that, I'll turn the call over to Tim.
Timothy J. Donahue
Thank you, Tom and good morning to everyone. As reflected in last night's earnings release and as Tom just discussed, we had a solid fourth quarter and full year 2018 performance. Higher beverage can shipments and better-than-expected results in the newly-acquired Transit Packaging business offset weak European food can demand, the result of an historically poor harvest.