DOW JONES NEWSWIRES 
 

Ball Corp.'s (BLL) second-quarter profit rose 33%, helped by a divestiture gain, but core earnings at the plastic and metal packaging company also beat expectations amid efforts to align operations with slumping demand.

Shares rose 3.4% to $49.24. The stock is up 18% this year.

Chairman and Chief Executive David Hoover said he expects 2009 earnings to "exceed" 2008's results and expects "continued improvement" for the rest of the year. Analysts surveyed by Thomson Reuters, on average, forecast a 6% increase to $3.83 a share.

Ball has cut costs, shut plants and trimmed inventory amid weak demand. In May, Moody's Investors Service said effective cost management had led the U.S. packaging industry to see a rebound in volume.

Hoover said the latest results "reflect the actions we have taken over the past 18 months to better align our supply with demand, a seasonal increase in volumes and better plant performance throughout our operations."

Ball reported earnings of $133.3 million, or $1.40 a share, up from $100 million, or $1.02 a share, a year earlier. Excluding items including the gain from selling a stake in satellite company DigitalGlobe Inc. (DGI), earnings rose to $1.20 a share from $1.10 a share.

Net sales fell 7.4% to $1.93 billion.

Analysts surveyed by Thomson Reuters were expecting earnings, excluding items, of $1.08 a share on revenue of $1.97 billion.

Gross margin rose to 17.3% from 16.4%.

Earnings in the metal-beverage packaging segment for the Americas and Asia - the company's biggest business - fell 3.4% as sales dropped 10%. Europe had a 16% profit decline as sales decreased 14%.

In July, Ball said it agreed to acquire four of Anheuser-Busch InBev NV's (ABI.BT) U.S. plants for $577 million in a deal to add to Ball's 2010 cash flow and earnings.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com;