Bli medlem
Bli medlem

Du är här

2016-10-25

Owens-Illinois, Inc.: O-I REPORTS THIRD QUARTER 2016 RESULTS; Steady improvement in earnings per share driven by further progress on strategic initiatives and t

FOR IMMEDIATE RELEASE

O-I REPORTS THIRD QUARTER 2016 RESULTS

Steady improvement in earnings per share driven by further progress on
strategic
initiatives and the acquired business in Mexico

PERRYSBURG, Ohio (Oct. 25, 2016)
- Owens-Illinois, Inc. (NYSE: OI) today reported financial results for the
third quarter ended Sept. 30, 2016.

Third Quarter Highlights

* Earnings from continuing operations were $0.68 per share (diluted), which
was in line with management's guidance of $0.65 to $0.70 per share. This
compares favorably with earnings from continuing operations in the third
quarter of 2015 of $0.11 per share (diluted), and, on an adjusted
basis,[1]of $0.57 per share.
* Net sales were $1.7 billion, up 9 percent from the prior year third
quarter, due to the incremental third quarter net sales from the Company's
acquisition of Vitro's food and beverage business (the "acquired
business"). Excluding the impact of the acquired business, shipments were 2
percent below the prior year period. Higher shipments in North America were
more than offset by lower volumes in Latin America, mainly due to the
challenging economic environment in Brazil and Ecuador.
* Earnings from continuing operations before income taxes were $153 million
in the quarter. Segment operating profit of reportable segments1was $237
million, an increase of $38 million, or 19 percent, compared with prior
year. The increase was largely attributable to $37 million of incremental
segment operating profit from the acquired business. All regions except
Europe posted higher segment operating profit compared with prior year.
* Strategic initiatives are on track to deliver on the 2016 targets. In the
quarter, these initiatives contributed approximately $15 million to segment
operating profit.
* With respect to full year guidance, the Company is narrowing its range for
earnings, while maintaining the midpoint of the range, and reaffirming its
target for cash flow.

"I'm pleased with our performance during the quarter and the progress we're
making against our strategic initiatives," said CEO Andres Lopez. "The
steady, year-on-year improvement we've achieved despite difficult market
conditions reflects the strength of our team, our plan and our solid
operational performance. For the full year, we're still expecting a
double-digit increase in earnings and continued deleveraging driven by strong
cash flow."

Third Quarter 2016 Results

Net sales in the third quarter of 2016 were $1.7 billion, up $146 million, or
9 percent, from the prior year third quarter. The Company's investment in
non-organic growth continued to drive the top line higher; the acquired
business generated an incremental $162 million in net sales due to strong
shipments within Mexico and to the United States. Price was up $19 million on
a global basis, primarily driven by price adjustments that reflect cost
inflation.

Excluding the acquired business, sales volumes declined approximately 2
percent compared to the third quarter of 2015. As expected, shipments in
Europe were comparable to the prior year quarter; gains in wine were
essentially offset by lower beer shipments. In North America, legacy volumes
were modestly up compared to the prior year, due to higher beer shipments -
primarily related to contracted volumes to Constellation Brands, Inc. - and
higher non-alcoholic beverage shipments. Third quarter shipments for legacy
Latin America declined nearly 15 percent, mainly due to economic weakness in
Brazil and Ecuador. Asia Pacific reported a 5 percent decrease in shipments.
In mature markets, sales volumes were similar to prior year, while in-country
production volumes were lower due to planned engineering activity. Sales
volumes in mature markets were supported by intra-regional shipments; in
turn, domestic sales in emerging markets declined.

Earnings from continuing operations before income taxes were $153 million in
the quarter, an increase of $95 million compared with prior year. This was
mainly driven by higher segment operating profit ($38 million) and lower
costs for items not considered representative of ongoing operations ($64
million). These were partially offset by higher retained corporate costs ($8
million).

Segment operating profit was $237 million in the third quarter, $38 million
higher than prior year third quarter.

* In the quarter, the acquired business contributed $37 million of
incremental segment operating profit. Strong domestic sales, the
incremental impact of the new furnace in Monterrey, cost synergies and
higher productivity all contributed to its strong performance. The acquired
business is still on target to exceed management's initial expectations of
$140-145 million in segment operating profit for the full year.
* Europe reported segment operating profit of $64 million, which was $4
million below the prior year, yet flat year-on-year on a constant currency
basis. Europe faced a $4 million currency headwind, mainly due to the
British pound. Operating performance continued to improve in the third
quarter buoyed by efforts across the region. These gains were essentially
offset by the impact of higher engineering activity and the negative
price-cost spread.
* Segment operating profit for North America was $79 million in the quarter.
This was $18 million, or 30 percent, higher than the prior year third
quarter. Approximately two-thirds of the increase was due to the acquired
business. The legacy business benefited from higher sales volumes and
further contributions from strategic initiatives.
* Latin America's segment operating profit reached $74 million, up 45 percent
compared with the prior year quarter. The very successful integration of
the acquired business contributed an incremental $25 million of segment
operating profit. The legacy business delivered a very solid performance
despite the challenging economic situation in Brazil and Ecuador. The
management team continues to focus on controlling costs and monetizing
minor non-strategic assets.
* Asia Pacific reported segment operating profit of $20 million, up 5 percent
compared with the prior year. Lower sales volumes did not adversely impact
segment operating profit due to the geographic mix of sales. The favorable
impact from currency was partially offset by lower production volume and
the costs for intra-regional shipments, which were necessitated by planned
engineering activity.

Retained corporate and other costs amounted to $18 million, which compares
with $10 million in the prior year quarter. The change from prior year mainly
relates to higher non-service pension costs and the impact of foreign
currency hedges.

Net interest expense in the quarter was $66 million compared with $67 million
for the third quarter of 2015. Interest expense in the third quarter of 2015
included $14 million principally due to note repurchase premiums and the
write-off of finance fees related to debt redeemed in the quarter. Exclusive
of these items, net interest expense increased $13 million from the third
quarter of the prior year primarily due to acquisition-related interest
expense. The Company continues to benefit from low variable interest rates.

The Company reported third quarter 2016 earnings of $0.68 per share (diluted).
This was solidly within management's guidance of $0.65 to $0.70 per share.

Outlook

The Company expects earnings from continuing operations attributable to the
Company (diluted) for the full year 2016 to be in the range of $2.21 to $2.26
per share. Excluding certain items management considers not representative of
ongoing operations, this equates to adjusted earnings per share[2]for full
year 2016 in the range of $2.27 to $2.32, which simply narrows prior
guidance. The earnings guidance ranges reflect uncertainty in macroeconomic
conditions and currency rates, among other factors. Reflecting the
aforementioned assumptions, the Company continues to expect cash provided by
continuing operating activities for 2016 to be approximately $750 million.
After deducting additions to property, plant and equipment of approximately
$450 million, free cash flow[3]for 2016 is expected to be approximately $300
million, which is consistent with prior guidance.

Conference Call Scheduled for Oct. 26, 2016

O-I CEO Andres Lopez and CFO Jan Bertsch will conduct a conference call to
discuss the Company's latest results on Wednesday, Oct. 26, 2016, at 8:00
a.m. EDT. 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.

The conference call also may be accessed by dialing 888-733-1701 (U.S. and
Canada) or 706-634-4943 (international) by 7:50 a.m. EDT, on Oct. 26. Ask for
the O-I conference call. A replay of the call will be available on the O-I
website,www.o-i.com/investors, for a year following the call.

Contact: Sasha Sekpeh, 567-336-5128 - O-I Investor Relations
Kristin Kelley, 567-336-2395 - O-I Corporate Communications

O-I news releases are available on the O-I website atwww.o-i.com.

O-I's fourth quarter 2016 earnings conference call is currently scheduled for
Thursday, Feb. 2, 2017, at 8:00 a.m. EST.

About O-I

Owens-Illinois, Inc. (NYSE: OI) is the world's largest glass container
manufacturer and preferred partner for many of the world's leading food and
beverage brands. The Company had revenues of $6.2 billion in 2015 and employs
27,000 people at 80 plants in 23 countries. With global headquarters in
Perrysburg, Ohio, O-I delivers safe, sustainable, pure, iconic,
brand-building glass packaging to a growing global marketplace. For more
information, visito-i.com.

Non-GAAP Financial Measures

Management believes that its presentation and use of certain non-GAAP
financial measures, including adjusted EPS and free cash flow, provide
relevant and useful information, which is widely used by analysts, investors
and competitors in the industry, as well as by management in assessing both
consolidated and business unit performance. The information presented
regarding adjusted EPS relates to net earnings from continuing operations
attributable to the Company, exclusive of items management considers not
representative of ongoing operations because such items are not reflective of
the normal earnings of the business, divided by weighted average shares
outstanding (diluted). Management has included adjusted EPS to assist in
understanding the comparability of results of ongoing operations. Further,
the information presented regarding free cash flow relates to cash provided
by continuing operating activities less capital spending and management has
included free cash flow to ...

Författare Hugin

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.