O-I GLASS REPORTS THIRD QUARTER 2024 RESULTS
O-I Glass reported a challenging third quarter 2024, with net sales declining to $1.7 billion, down $64 million from the prior year. The company reported a loss of $0.52 per share, compared to earnings of $0.32 per share in Q3 2023. Segment operating profit decreased to $144 million from $301 million year-over-year. Despite a 2% increase in sales volume, results were impacted by a 4% decrease in average selling prices and production curtailments to reduce inventory levels. The company revised its 2024 guidance, now expecting adjusted earnings per share between $0.70-$0.80, down from $1.00-$1.25, and forecasts a free cash flow use of $130-$170 million.
O-I Glass ha riportato un terzo trimestre 2024 difficile, con vendite nette che sono scese a 1,7 miliardi di dollari, in calo di 64 milioni rispetto all'anno precedente. L'azienda ha registrato una perdita di 0,52 dollari per azione, rispetto agli utili di 0,32 dollari per azione nel terzo trimestre del 2023. Il profitto operativo del segmento è diminuito a 144 milioni di dollari da 301 milioni anno su anno. Nonostante un aumento del 2% nel volume delle vendite, i risultati sono stati influenzati da un calo del 4% nei prezzi di vendita medi e dalle limitazioni della produzione per ridurre i livelli di inventario. L'azienda ha rivisto le sue previsioni per il 2024, ora prevedendo utili per azione rettificati tra 0,70 e 0,80 dollari, in calo rispetto all'intervallo precedente di 1,00-1,25 dollari, e prevede un utilizzo di flusso di cassa libero tra 130 e 170 milioni di dollari.
O-I Glass reportó un tercer trimestre 2024 desafiante, con ventas netas que cayeron a 1.7 mil millones de dólares, una disminución de 64 millones en comparación con el año anterior. La compañía reportó una pérdida de 0.52 dólares por acción, en comparación con ganancias de 0.32 dólares por acción en el tercer trimestre de 2023. El beneficio operativo del segmento disminuyó a 144 millones de dólares desde 301 millones año tras año. A pesar de un aumento del 2% en el volumen de ventas, los resultados se vieron afectados por una disminución del 4% en los precios de venta promedio y recortes en la producción para reducir los niveles de inventario. La empresa revisó su pronóstico para 2024, ahora esperando ganancias por acción ajustadas entre 0.70 y 0.80 dólares, en comparación con el rango anterior de 1.00 a 1.25 dólares, y prevé un uso de flujo de efectivo libre de 130 a 170 millones de dólares.
O-I Glass는 2024년 3분기에 어려운 실적을 발표했으며, 순매출은 17억 달러로 지난해보다 6400만 달러 감소했습니다. 회사는 1주당 0.52달러의 손실을 보고했으며, 이는 2023년 3분기의 주당 0.32달러의 수익과 비교됩니다. 부문 운영 이익은 지난해 3억 0100만 달러에서 1억 4400만 달러로 감소했습니다. 판매량이 2% 증가했음에도 불구하고, 평균 판매 가격이 4% 하락하고 재고 수준을 줄이기 위한 생산 축소에 의해 결과가 영향을 받았습니다. 회사는 2024년 가이던스를 수정하여 조정된 주당 수익이 0.70-0.80달러 범위에 이를 것으로 예상하며, 이전의 1.00-1.25달러에서 감소하였고, 1억 3000만-1억 7000만 달러의 자유 현금 흐름 사용을 예측합니다.
O-I Glass a annoncé un troisième trimestre 2024 difficile, avec des ventes nettes en baisse à 1,7 milliard de dollars, soit une diminution de 64 millions par rapport à l'année précédente. L'entreprise a enregistré une perte de 0,52 dollar par action, contre des bénéfices de 0,32 dollar par action au T3 2023. Le bénéfice opérationnel par segment a diminué à 144 millions de dollars, contre 301 millions d'année en année. Malgré une augmentation de 2 % du volume des ventes, les résultats ont été affectés par une baisse de 4 % des prix de vente moyens et des réductions de production pour diminuer les niveaux de stocks. L'entreprise a révisé ses prévisions pour 2024, s'attendant désormais à un bénéfice par action ajusté compris entre 0,70 et 0,80 dollar, en baisse par rapport à l'intervalle précédent de 1,00 à 1,25 dollar, et prévoit une utilisation de flux de trésorerie disponible de 130 à 170 millions de dollars.
O-I Glass meldete ein herausforderndes drittes Quartal 2024, mit einem Rückgang des Nettoumsatzes auf 1,7 Milliarden Dollar, was einem Rückgang von 64 Millionen im Vergleich zum Vorjahr entspricht. Das Unternehmen meldete einen Verlust von 0,52 Dollar pro Aktie im Vergleich zu einem Gewinn von 0,32 Dollar pro Aktie im 3. Quartal 2023. Der operative Gewinn des Segments sank von 301 Millionen Dollar auf 144 Millionen Dollar im Jahresvergleich. Trotz eines Anstiegs des Verkaufsvolumens um 2% wurden die Ergebnisse durch einen Rückgang des durchschnittlichen Verkaufspreises um 4% und Produktionskürzungen zur Reduzierung der Lagerbestände beeinträchtigt. Das Unternehmen hat seine Prognose für 2024 überarbeitet und erwartet nun einen bereinigten Gewinn pro Aktie von 0,70-0,80 Dollar, was einen Rückgang von zuvor 1,00-1,25 Dollar darstellt, und sagt einen Nutzung des freien Cashflows von 130-170 Millionen Dollar voraus.
- Sales volume increased 2% overall, with Americas seeing a 7% rise
- Implementing Fit to Win initiative targeting $300M in annual savings by 2027
- Reduced retained corporate costs to $31M from $60M year-over-year
- Net loss of $0.52 per share vs. earnings of $0.32 per share in Q3 2023
- Segment operating profit declined 52% to $144M from $301M
- Average selling prices decreased 4%
- Guidance lowered: EPS now $0.70-$0.80 from $1.00-$1.25
- Free cash flow revised to negative $130-$170M
- Higher effective tax rate of 42-45% vs. previous 33-35%
- Net interest expense increased to $87M from $78M
Insights
PERRYSBURG, Ohio, Oct. 29, 2024 (GLOBE NEWSWIRE) -- FOR IMMEDIATE RELEASE
- Rapidly Implementing Fit To Win Priorities to Drive Improved Performance in 2025 and Beyond
- Business Returned to Modest Sales Volume Growth, Despite Sluggish Market Conditions
- Updating 2024 Business Outlook Amid Continued Muted Demand and Consumer Uncertainty
O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the third quarter ended September 30, 2024.
| Net Earnings (Loss) Attributable to the Company Per Share (Diluted) | Earnings (Loss) Before Income Taxes $M | |||||||||
| 3Q24 | 3Q23 | 3Q24 | 3Q23 | |||||||
| Reported | ($0.52) | $0.32 | ($57) | $82 | ||||||
| Adjusted Earnings (Loss) Earnings Per Share (Diluted) | Segment Operating Profit $M | |||||||||
| 3Q24 | 3Q23 | 3Q24 | 3Q23 | |||||||
| Non - GAAP | ($0.04) | $0.80 | $144 | $301 | ||||||
“Our third-quarter results declined when compared to the strong performance in the prior year period. Lower earnings primarily reflected significant production curtailment as we took decisive action to reduce high inventory levels after several quarters of sluggish demand. Net price was also down which was partially offset by modestly higher shipment levels,” said Gordon Hardie, CEO of O-I Glass.
“We are aggressively implementing our initial Fit to Win priorities. Along with reducing inventories, we are rebalancing our network to eliminate unprofitable and redundant capacity as well as executing the first phase of our SG&A reduction program.”
“We do not believe our 2024 performance is reflective of what the business can deliver. We are determined to improve results in 2025 and beyond, as we drive the improvement measures in our Fit to Win program,” Hardie added.
Net sales were
The company reported a loss before income taxes of
Segment operating profit was
- Americas: Segment operating profit in the Americas was
$88 million , down from$116 million in the prior year period. This decline reflected a$24 million impact from lower net price which was partially offset by a nearly 7 percent increase in sales volume (in tons) which benefited segment operating profit by$14 million . Operating costs increased$17 million due to temporary production curtailment to rebalance inventory levels in response to lower demand in recent quarters, mitigated by effective operating and cost management. Segment operating profit was also impacted by$1 million from unfavorable foreign currency translation. - Europe: Segment operating profit in Europe was
$56 million , compared to$185 million in the prior year period. This decline reflected a$55 million impact from lower net price, a 2 percent decrease in sales volume (in tons) which reduced segment operating profit by$3 million , and$74 million of higher operating costs resulting from significant temporary production curtailments. However, segment operating profit benefited by$3 million from favorable foreign currency translation.
Retained corporate and other costs were
Net interest expense totaled
O-I generated a net loss attributable to the company of
The company reported an adjusted loss of
2024 Outlook
| FY24 GUIDANCE | ||
| CURRENT | Prior | |
| Sales Volume Growth (in Tons) | Down ▼ LSD / MSD | Flat to Down LSD |
| Adjusted Earnings Per Share (EPS) | ||
| Free Cash Flow ($M) | Use of | Source of |
The company has revised its full year guidance given softer than anticipated market demand. Management now expects 2024 adjusted earnings per share will be between
This updated guidance reflects lower than anticipated shipment levels for the year, additional temporary production curtailment to reduce inventory levels amid softer demand in the remainder of 2024, and a higher effective tax rate due to lower earnings. Actions to optimize inventory and O-I’s manufacturing network are required to accelerate and reshape the company’s cost profile to deliver better, more sustainable results in 2025 and beyond.
Management has also revised its full-year free cash flow outlook to a use of cash between
Guidance primarily reflects the company’s current view on sales and production volume, mix, and working capital trends. O-I’s adjusted earnings outlook assumes foreign currency rates as of October 28, 2024, and a full-year adjusted effective tax rate of approximately 42 to 45 percent compared to the prior outlook of 33 to 35 percent. The adjusted earnings and free cash flow guidance ranges may not fully reflect uncertainty in macroeconomic conditions, currency rates, energy and raw materials costs, supply chain disruptions and labor challenges, among other factors.
Fit To Win Initiative
Management is implementing the first phase of O-I’s Fit to Win initiative which is expected to deliver at least
O-I is moving to de-layer the organization, shift accountability to local markets, reduce central operating costs, and drive tighter capital discipline. These actions should reduce SG&A expense to no more than 5 percent of sales by early 2026, saving over
Management is seeking to eliminate unprofitable and redundant capacity to increase network utilization and boost productivity. The company is evaluating the closure of at least 7 percent of capacity by mid-2025 to reduce the fixed base of the network and generate more than
Conference Call Scheduled for October 30, 2024
O-I’s management team will conduct a conference call to discuss the company’s latest results on Wednesday, October 30, 2024, at 8:00 a.m. ET. 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 News and Events 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 fourth quarter and year end 2024 earnings conference call is currently scheduled for Wednesday, February 5, 2025 at 8:00 a.m. ET.
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 approximately 23,000 people across 68 plants in 19 countries, O-I achieved net sales of
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, segment operating profit, segment operating profit margin and adjusted effective tax rate 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. Segment operating profit margin is calculated as segment operating profit divided by segment net sales. Adjusted effective tax rate relates to provision for income taxes, exclusive of items management considers not representative of ongoing operations and other adjustments divided by earnings before income taxes, exclusive of items management considers not representative of ongoing operations and other adjustments. Management uses adjusted earnings, adjusted earnings per share, segment operating profit, segment operating profit margin and adjusted effective tax rate 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. The above non-GAAP financial measures 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. Management has historically used 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 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 Glass” 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 general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to economic and social conditions, trade disputes, 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, public health issues and weather, (2) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current Ukraine-Russia and Israel-Hamas conflicts and disruptions in supply of raw materials caused by transportation delays), (3) competitive pressures from other glass container producers and alternative forms of packaging or consolidation among competitors and customers, (4) changes in consumer preferences or customer inventory management practices, (5) the continuing consolidation of the Company’s customer base, (6) the Company’s ability to improve its glass melting technology, known as the MAGMA program, and implement it in a manner to deliver economic profit within the timeframe expected, (7) unanticipated supply chain and operational disruptions, including higher capital spending, (8) the Company’s ability to achieve expected benefits from cost management, efficiency improvements, and profitability initiatives, such as its Fit to Win program, including expected impacts from production curtailments and furnace closures, (9) seasonality of customer demand, (10) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (11) labor shortages, labor cost increases or strikes, (12) 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, (13) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, (14) any increases in the underfunded status of the Company’s pension plans, (15) any failure or disruption of the Company’s information technology, or those of third parties on which the Company relies, or any cybersecurity or data privacy incidents affecting the Company or its third-party service providers, (16) risks related to the Company’s indebtedness or changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to generate cash to service indebtedness and refinance debt on favorable terms, (17) risks associated with operating in foreign countries, (18) foreign currency fluctuations relative to the U.S. dollar, (19) changes in tax laws or U.S. trade policies, (20) the Company’s ability to comply with various environmental legal requirements, (21) risks related to recycling and recycled content laws and regulations, (22) risks related to climate-change and air emissions, including related laws or regulations and increased ESG scrutiny and changing expectations from stakeholders, 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 of operations and financial condition, the company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.
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