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O-I Glass (OI) Tops Q2 Earnings Estimates, Lowers '24 Outlook
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O-I Glass, Inc. (OI - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 44 cents, which beat the Zacks Consensus Estimate of 42 cents. On a year-over-year basis, earnings fell 50%, reflecting lower demand.
Including one-time items, O-I Glass reported an EPS of 36 cents for the quarter compared with 69 cents in the prior-year quarter.
Revenues were $1.73 billion for the quarter under review, down 8.5% from the year-ago quarter mainly due to lower average selling prices, unfavorable foreign currency translation and lower sales volume. The top line missed the Zacks Consensus Estimate of $1.75 billion. Sales volume (in tons) declined 4.5% in the quarter.
The cost of sales was down 3.3% year over year to $1.43 billion. Gross profit decreased 27.2% year over year to $303 million. The gross margin was 17.5% for the quarter under review, compared with 22% in the prior-year quarter. Selling and administrative expenses were down 23.1% year over year to $110 million.
Adjusted segment operating profit amounted to $233 million for the reported quarter, down from the prior-year period’s $326 million.
Segmental Performance
Net sales in the Americas segment fell 9.7% year over year to $899 million for the second quarter. Our model estimated the segment’s net sales to be $912 million. Operating profit was down 15.9% year over year to $106 million. The figure was lower than our estimate of $111 million. Gains from the slightly favorable net price were offset by an 8.5% drop in sales volumes (in tons).
Net sales in the Europe segment were $802 million for the reported quarter, down 7.1% year over year. The figure was lower than our estimate of $849 million. The segment’s operating profit fell 36.5% year over year to $127 million. Our model had predicted an operating profit of $142 million.
Financial Update
O-I Glass had cash and cash equivalents of $671 million at the end of Jun 30, 2024, down from $913 million at 2023 end. The company generated $250 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $291 million.
Its long-term debt was $4.65 billion as of Jun 30, 2024, down from $4.7 billion as of Dec 31, 2023.
Outlook
Citing weak demand and planned temporary production curtailment to reduce inventory levels, OI lowered its projection for 2024. It expects adjusted earnings of $1.00-$1.25 per share, down from the previously stated $1.50-$2.00. Sales volume (in tons) is projected to be flat to down in the low-single digits. OI expects the 2024 free cash flow to be $50-$100 million, lowered from previously stated $100-$150 million.
Price Performance
Shares of the company have lost 48.2% in a year compared with the industry’s 28.1% decline.
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Sales in the second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
AptarGroup, Inc. (ATR - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.36. The bottom line increased 12% year over year from $1.22 (including comparable exchange rates).
Total revenues rose 1.6% year over year to $910 million in the reported quarter. The reported figure missed the Zacks Consensus Estimate of $923 million. Core sales, excluding currency and acquisition effects, improved 3% year over year. The upside was driven by the solid performance in the Pharma segment. We expected core sales to rise 2.6% in the quarter.
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O-I Glass (OI) Tops Q2 Earnings Estimates, Lowers '24 Outlook
O-I Glass, Inc. (OI - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 44 cents, which beat the Zacks Consensus Estimate of 42 cents. On a year-over-year basis, earnings fell 50%, reflecting lower demand.
Including one-time items, O-I Glass reported an EPS of 36 cents for the quarter compared with 69 cents in the prior-year quarter.
O-I Glass, Inc. Price, Consensus and EPS Surprise
O-I Glass, Inc. price-consensus-eps-surprise-chart | O-I Glass, Inc. Quote
Operational Update
Revenues were $1.73 billion for the quarter under review, down 8.5% from the year-ago quarter mainly due to lower average selling prices, unfavorable foreign currency translation and lower sales volume. The top line missed the Zacks Consensus Estimate of $1.75 billion. Sales volume (in tons) declined 4.5% in the quarter.
The cost of sales was down 3.3% year over year to $1.43 billion. Gross profit decreased 27.2% year over year to $303 million. The gross margin was 17.5% for the quarter under review, compared with 22% in the prior-year quarter. Selling and administrative expenses were down 23.1% year over year to $110 million.
Adjusted segment operating profit amounted to $233 million for the reported quarter, down from the prior-year period’s $326 million.
Segmental Performance
Net sales in the Americas segment fell 9.7% year over year to $899 million for the second quarter. Our model estimated the segment’s net sales to be $912 million. Operating profit was down 15.9% year over year to $106 million. The figure was lower than our estimate of $111 million. Gains from the slightly favorable net price were offset by an 8.5% drop in sales volumes (in tons).
Net sales in the Europe segment were $802 million for the reported quarter, down 7.1% year over year. The figure was lower than our estimate of $849 million. The segment’s operating profit fell 36.5% year over year to $127 million. Our model had predicted an operating profit of $142 million.
Financial Update
O-I Glass had cash and cash equivalents of $671 million at the end of Jun 30, 2024, down from $913 million at 2023 end. The company generated $250 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $291 million.
Its long-term debt was $4.65 billion as of Jun 30, 2024, down from $4.7 billion as of Dec 31, 2023.
Outlook
Citing weak demand and planned temporary production curtailment to reduce inventory levels, OI lowered its projection for 2024. It expects adjusted earnings of $1.00-$1.25 per share, down from the previously stated $1.50-$2.00. Sales volume (in tons) is projected to be flat to down in the low-single digits. OI expects the 2024 free cash flow to be $50-$100 million, lowered from previously stated $100-$150 million.
Price Performance
Shares of the company have lost 48.2% in a year compared with the industry’s 28.1% decline.
Image Source: Zacks Investment Research
Zacks Rank
O-I Glass currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Packaging Stocks
Greif, Inc. (GEF - Free Report) reported adjusted earnings per share of 82 cents in second-quarter fiscal 2024 (ended Apr 30, 2024), which surpassed the Zacks Consensus Estimate of 77 cents. The bottom line fell 54% year over year. Results were impacted by elevated raw material, transportation and manufacturing costs, and higher SG&A expenses, reflecting increased compensation expenses and costs incurred for strategic investments.
Sales rose 4.1% year over year to $1.37 billion. The top line surpassed the Zacks Consensus Estimate of $1.31 billion.
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share of $2.20 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.12. The reported figure was higher than the company’s guidance of $2.07 in the quarter under review. However, the bottom line decreased 5% year over year.
Sales in the second quarter grew 6.3% year over year to $2.08 billion. The top line beat the Zacks Consensus Estimate of $2.03 billion.
AptarGroup, Inc. (ATR - Free Report) reported second-quarter 2024 adjusted earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.36. The bottom line increased 12% year over year from $1.22 (including comparable exchange rates).
Total revenues rose 1.6% year over year to $910 million in the reported quarter. The reported figure missed the Zacks Consensus Estimate of $923 million. Core sales, excluding currency and acquisition effects, improved 3% year over year. The upside was driven by the solid performance in the Pharma segment. We expected core sales to rise 2.6% in the quarter.