O-I Glass Reports Second Quarter 2022 Results
O-I Glass, Inc. (NYSE: OI) reported robust second-quarter 2022 results, with net earnings at $1.59 per share, significantly up from $0.73 the previous year. Revenue climbed to $1.8 billion, bolstered by higher selling prices that offset inflationary pressures. The company also resolved legacy asbestos liabilities and increased its full-year earnings guidance to between $2.05 and $2.20 per share, reflecting strong performance and favorable projections. Segment operating profit reached $257 million. O-I continues its transformation strategy, including a new greenfield facility in Bowling Green, KY, set to begin production in mid-2024.
- Net earnings increased to $1.59 per share, up from $0.73 in Q2 2021.
- Revenue rose to $1.8 billion, driven by higher selling prices and partially offset by foreign currency translation.
- Segment operating profit improved to $257 million, compared to $232 million in the prior year.
- Full-year earnings guidance raised to $2.05-$2.20 per share, reflecting strong year-to-date performance.
- Successful resolution of legacy asbestos liabilities and full funding of the 524(g) trust.
- Sales impacted by $95 million due to unfavorable foreign currency translation.
- Divestitures accounted for a $11 million reduction in sales.
- Retained corporate costs increased to $53 million, up from $42 million in the prior year.
- Incremental expenses for expansion projects may affect operating costs.
PERRYSBURG, Ohio, Aug. 02, 2022 (GLOBE NEWSWIRE) -- FOR IMMEDIATE RELEASE
- Strong second quarter results exceeded guidance
- Delivered on key transformation commitments including resolution of legacy asbestos liabilities
- Management increased full-year 2022 financial outlook
O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the second quarter ended June 30, 2022.
| Net Earnings (Loss) Attributable to the Company Earnings Per Share (Diluted) | Earnings (loss) Before Income Taxes $M | |||||||
| 2Q22 | 2Q21 | 2Q22 | 2Q21 | |||||
| Reported | $1.59 | $0.73 | $328 | $198 | ||||
| Adjusted Earnings Earnings Per Share (Diluted) | Segment Operating Profit $M | |||||||
| 2Q22 | 2Q21 | 2Q22 | 2Q21 | |||||
| Non – GAAP1 | $0.73 (Guidance: > | $0.54 | $257 | $232 | ||||
“O-I reported strong second quarter net earnings attributable to the company and adjusted earnings exceeded guidance demonstrating exceptional agility amid elevated market volatility. As expected, our glass shipments increased slightly compared to the prior year period and the benefit of higher selling prices continued to more than offset elevated cost inflation. Strong earnings also reflected solid operating and cost performance supported by O-I’s ongoing Margin Expansion initiatives.”
“Importantly, O-I delivered on key commitments along our transformation journey. The balance sheet is now in its best position since prior to the acquisition of O-I Mexico in 2015. The company recently announced the first U.S. MAGMA greenfield facility at Bowling Green, KY which should commence production mid-2024. Additionally, Paddock has achieved a fair and final resolution of its legacy asbestos liabilities and the 524(g) trust was fully funded as of July 18th, 2022.”
“Overall, O-I is operating very well and is delivering on its transformation commitments which will benefit all stakeholders and continue to create value for our shareholders,” said Andres Lopez, O-I Glass CEO.
Net sales were
Segment operating profit was
- Americas: Segment operating profit in the Americas was
$130 million compared to$124 million in the second quarter of 2021. Results included$4 million of unfavorable foreign currency translation. Shipments increased about one percent (in tons) and elevated cost inflation was mostly offset by the benefit of higher selling prices. Operating costs were lower than the prior year quarter reflecting the benefit of ongoing Margin Expansion initiatives which were partially offset by higher repair costs and unplanned production downtime. - Europe: Segment operating profit in Europe was
$127 million compared to$108 million in the second quarter of 2022. Results included$13 million of unfavorable foreign currency translation. Shipments increased approximately one percent (in tons) and the benefit of higher selling prices more than offset elevated cost inflation. Operating costs were higher than the prior year primarily due to higher engineering project activity more than exceeding the benefits from Margin Expansion initiatives and cost control measures.
Retained corporate and other costs were
For the second quarter 2022, net earnings attributable to the company were
In both the second quarter of 2022 and 2021, the company recorded several significant items impacting reported results as presented in the table entitled Reconciliation for Adjusted Earnings. Management considers these items not representative of ongoing operations and they are excluded from adjusted earnings. In the second quarter of 2022, this included a
Excluding certain items management considers not representative of ongoing operations and other adjustments, adjusted earningsP0F were
2022 Outlook
“The company is increasing its full-year 2022 earnings and free cash flow outlook reflecting strong year-to-date performance and expected favorable performance in the second half of the year,” concluded Lopez.
O-I expects third quarter 2022 adjusted earnings will approximate
The company has raised its full-year 2022 earnings guidance. Management now expects adjusted earnings per share of between
O-I’s earnings outlook assumes foreign currency rates as of July 31, 2022, earnings dilution from the company’s Portfolio Optimization program, incremental interest expense for debt incurred to settle the Paddock 524(g) trust and an effective annual adjusted tax rate of approximately 25 to 28 percent. The free cash flow and adjusted free cash flow outlook excludes
Conference Call Scheduled for August 3, 2022
O-I CEO Andres Lopez and CFO John Haudrich will conduct a conference call to discuss the company’s latest results on Wednesday, August 3, 2022, at 8:00 a.m. EST. A live webcast of the conference call, including presentation materials, will be available on the O-I website, www.o-i.com/investors, in the Webcasts and Presentations section. A replay of the call will be available on the website for a year following the event.
Contact: Sasha Sekpeh, 567-336-5128 – O-I Investor Relations
O-I news releases are available on the O-I website at www.o-i.com.
O-I’s third quarter 2022 earnings conference call is currently scheduled for Wednesday, November 2, 2022 at 8:00 a.m. EDT.
About O-I Glass
At O-I Glass, Inc. (NYSE: OI), we love glass and we’re proud to be one of the leading producers of glass bottles and jars around the globe. Glass is not only beautiful, it’s also pure and completely recyclable, making it the most sustainable rigid packaging material. Headquartered in Perrysburg, Ohio (USA), O-I is the preferred partner for many of the world’s leading food and beverage brands. We innovate in line with customers’ needs to create iconic packaging that builds brands around the world. Led by our diverse team of more than 24,000 people across 70 plants in 19 countries, O-I achieved net sales of
o-i.com / Facebook / Twitter / Instagram / LinkedIn
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures, which are measures of its historical or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. Management believes that its presentation and use of certain non-GAAP financial measures, including adjusted earnings, adjusted earnings per share, free cash flow, adjusted free cash flow and segment operating profit, provide relevant and useful supplemental financial information that is widely used by analysts and investors, as well as by management in assessing both consolidated and business unit performance. These non-GAAP measures are reconciled to the most directly comparable GAAP measures and should be considered supplemental in nature and should not be considered in isolation or be construed as being more important than comparable GAAP measures.
Adjusted earnings relates to net earnings attributable to the company, exclusive of items management considers not representative of ongoing operations and other adjustments because such items are not reflective of the company’s principal business activity, which is glass container production. Adjusted earnings are divided by weighted average shares outstanding (diluted) to derive adjusted earnings per share. Segment operating profit relates to earnings before interest expense, net, and before income taxes and is also exclusive of items management considers not representative of ongoing operations as well as certain retained corporate costs and other adjustments. Management uses adjusted earnings, adjusted earnings per share, and segment operating profit to evaluate its period-over-period operating performance because it believes these provide useful supplemental measures of the results of operations of its principal business activity by excluding items that are not reflective of such operations. Adjusted earnings, adjusted earnings per share and segment operating profit may be useful to investors in evaluating the underlying operating performance of the company’s business as these measures eliminate items that are not reflective of its principal business activity.
Further, free cash flow relates to cash provided by operating activities less cash payments for property, plant, and equipment. Adjusted free cash flow relates to cash provided by operating activities less cash payments for property, plant and equipment pertaining to base maintenance activity. Management has historically used free cash flow and adjusted free cash flow to evaluate its period-over-period cash generation performance because it believes these have provided useful supplemental measures related to its principal business activity. It should not be inferred that the entire free cash flow or adjusted free cash flow amount is available for discretionary expenditures, since the company has mandatory debt service requirements and other non-discretionary expenditures that are not deducted from these measures. Management uses non-GAAP information principally for internal reporting, forecasting, budgeting, and calculating compensation payments.
The company routinely posts important information on its website – www.o-i.com/investors.
Forward-Looking Statements
This press release contains “forward-looking” statements related to O-I Glass, Inc. (“O-I” or the “company”) within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements reflect the company’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward-looking statements.
It is possible that the company’s future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the impact of the COVID-19 pandemic and the various governmental, industry and consumer actions related thereto, (2) the company’s ability to obtain the benefits it anticipates from the Corporate Modernization, (3) the company’s ability to manage its cost structure, including its success in implementing restructuring or other plans aimed at improving the company’s operating efficiency and working capital management, and achieving cost savings, (4) the company’s ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (5) the company’s ability to achieve its strategic plan, (6) the company’s ability to improve its glass melting technology, known as the MAGMA program, and implement it within the timeframe expected, (7) foreign currency fluctuations relative to the U.S. dollar, (8) changes in capital availability or cost, including interest rate fluctuations and the ability of the company to refinance debt on favorable terms, (9) the general political, economic and competitive conditions in markets and countries where the company has operations, including uncertainties related to economic and social conditions, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, war, civil disturbance or acts of terrorism, natural disasters, and weather, (10) the company’s ability to generate sufficient future cash flows to ensure the company’s goodwill is not impaired, (11) consumer preferences for alternative forms of packaging, (12) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current conflict between Russia and Ukraine), (13) consolidation among competitors and customers, (14) unanticipated expenditures with respect to data privacy, environmental, safety and health laws, (15) unanticipated operational disruptions, including higher capital spending, (16) the company’s ability to further develop its sales, marketing and product development capabilities, (17) the failure of the company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (18) the ability of the company and the third parties on which it relies for information technology system support to prevent and detect security breaches related to cybersecurity and data privacy, (19) changes in U.S. trade policies, (20) risks related to recycling and recycled content laws and regulations, (21) risks related to climate-change and air emissions, including related laws or regulations and the other risk factors discussed in the company's filings with the Securities and Exchange Commission.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this document are based on certain assumptions and analyses made by the company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. While the company continually reviews trends and uncertainties affecting the company’s results or operations and financial condition, the company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.
1 Adjusted earnings per share, free cash flow, adjusted free cash flow and segment operating profit are each non-GAAP financial measures. See tables included in this release for reconciliations to the most directly comparable GAAP measures.
Attachments
FAQ
What were O-I Glass's second-quarter results for 2022?
How much did O-I Glass raise its earnings guidance for 2022?
What impact did foreign currency translation have on O-I Glass's sales?
When is the new greenfield facility in Bowling Green, KY expected to start production?
What was the segment operating profit for O-I Glass in Q2 2022?
