We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
O-I Glass (OI) Down 0.6% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is O-I Glass due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
O-I Glass reported first-quarter 2023 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate of 83 cents. On a year-over-year basis, earnings increased 21% reflecting strong net price realization, solid operating performance and benefits from OI’s ongoing margin expansion initiatives despite lower volumes. The bottom line was also higher than the company’s most recent guidance of 80-85 cents per share.
Including one-time items, O-I Glass reported EPS of 69 cents for the quarter, compared with $1.59 in the prior-year quarter.
Operational Update
Revenues were $1.89 billion for the quarter under review, up 6.3% from the year-ago quarter’s level mainly due to higher selling prices as well as favorable foreign currency translation. The top line surpassed the Zacks Consensus Estimate of $1.8 billion. Sales volume (in tons) declined 9% in the quarter due to lower consumer spending and inventory destocking across the value chain.
The cost of sales was up 1% year over year to $1,474 million. Gross profit increased 28% year over year to $416 million. The gross margin was 22% for the quarter under review, compared with 18.3% in the prior-year quarter. Selling and administrative expenses were up 16.3% year over year to $143 million.
Adjusted segment operating profit amounted to $326 million for the reported quarter, up from the prior-year period’s $257 million.
Segment Performances
Net sales in the Americas segment rose 2.6% year over year to $996 million for the second quarter. Our model estimated the segment’s net sales to be $1,014 million. Operating profit was down 3% year over year to $126 million. The figure was lower than our estimate of $143 million.
Gains from favorable net price and margin expansion initiatives were offset by a 9% drop in volumes, temporary production curtailment undertaken by the company to balance supply with lower demand as well as elevated planned asset project activity.
Net sales in the Europe segment were $863 million for the reported quarter, up 12.8% year over year. The figure was higher than our estimate of $771 million.
The segment’s operating profit surged 58% year over year to $200 million, aided by favorable net price, solid operating performance and gains from margin expansion initiatives, However, the segment witnessed a 11% decline in sales volume. Our model had predicted operating profit of $156 million.
Financial Update
O-I Glass had cash and cash equivalents of $754 million at the end of Jun 30, 2023, down from $773 million at 2022 end. The company used $291 million of cash in operating activities in the quarter under review against the prior-year quarter’s inflow of $193 million.
Its long-term debt was $4.78 billion as of Jun 30, 2023, up from $4.37 billion as of Dec 31, 2022.
Outlook
O-I Glass now expects adjusted earnings in the range of $3.10 to $3.25 per share, narrower than its previous stated guidance of $3.05 per share to $3.25 per share. OI had reported adjusted EPS of $2.30 in 2022.
Sales volume growth (in tons) is projected to be down in mid-single digits to high-single digits (compared to the earlier expectation of low-single digit to mid-single digits). OI expects free cash flow in 2023 to be around $175 million, while adjusted free cash flow is expected to be $475 million.
For the third quarter of 2023, O-I Glass expects adjusted earnings between 68 cents per share and 73 cents per share. For the fourth quarter, EPS will likely range between 25 cents and 35 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.29% due to these changes.
VGM Scores
Currently, O-I Glass has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise O-I Glass has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
O-I Glass (OI) Down 0.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is O-I Glass due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
O-I Glass Q2 Earnings Beat Estimates, 2023 View Revised
O-I Glass reported first-quarter 2023 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate of 83 cents. On a year-over-year basis, earnings increased 21% reflecting strong net price realization, solid operating performance and benefits from OI’s ongoing margin expansion initiatives despite lower volumes. The bottom line was also higher than the company’s most recent guidance of 80-85 cents per share.
Including one-time items, O-I Glass reported EPS of 69 cents for the quarter, compared with $1.59 in the prior-year quarter.
Operational Update
Revenues were $1.89 billion for the quarter under review, up 6.3% from the year-ago quarter’s level mainly due to higher selling prices as well as favorable foreign currency translation. The top line surpassed the Zacks Consensus Estimate of $1.8 billion. Sales volume (in tons) declined 9% in the quarter due to lower consumer spending and inventory destocking across the value chain.
The cost of sales was up 1% year over year to $1,474 million. Gross profit increased 28% year over year to $416 million. The gross margin was 22% for the quarter under review, compared with 18.3% in the prior-year quarter. Selling and administrative expenses were up 16.3% year over year to $143 million.
Adjusted segment operating profit amounted to $326 million for the reported quarter, up from the prior-year period’s $257 million.
Segment Performances
Net sales in the Americas segment rose 2.6% year over year to $996 million for the second quarter. Our model estimated the segment’s net sales to be $1,014 million. Operating profit was down 3% year over year to $126 million. The figure was lower than our estimate of $143 million.
Gains from favorable net price and margin expansion initiatives were offset by a 9% drop in volumes, temporary production curtailment undertaken by the company to balance supply with lower demand as well as elevated planned asset project activity.
Net sales in the Europe segment were $863 million for the reported quarter, up 12.8% year over year. The figure was higher than our estimate of $771 million.
The segment’s operating profit surged 58% year over year to $200 million, aided by favorable net price, solid operating performance and gains from margin expansion initiatives, However, the segment witnessed a 11% decline in sales volume. Our model had predicted operating profit of $156 million.
Financial Update
O-I Glass had cash and cash equivalents of $754 million at the end of Jun 30, 2023, down from $773 million at 2022 end. The company used $291 million of cash in operating activities in the quarter under review against the prior-year quarter’s inflow of $193 million.
Its long-term debt was $4.78 billion as of Jun 30, 2023, up from $4.37 billion as of Dec 31, 2022.
Outlook
O-I Glass now expects adjusted earnings in the range of $3.10 to $3.25 per share, narrower than its previous stated guidance of $3.05 per share to $3.25 per share. OI had reported adjusted EPS of $2.30 in 2022.
Sales volume growth (in tons) is projected to be down in mid-single digits to high-single digits (compared to the earlier expectation of low-single digit to mid-single digits). OI expects free cash flow in 2023 to be around $175 million, while adjusted free cash flow is expected to be $475 million.
For the third quarter of 2023, O-I Glass expects adjusted earnings between 68 cents per share and 73 cents per share. For the fourth quarter, EPS will likely range between 25 cents and 35 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 8.29% due to these changes.
VGM Scores
Currently, O-I Glass has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise O-I Glass has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.