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Owens-Illinois (OI) Q2 Earnings Top, Revenues Miss Estimates
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Owens-Illinois, Inc. (OI - Free Report) reported second-quarter 2018 adjusted earnings of 77 cents per share, up 3% year over year. The reported figure came in ahead of the management guidance as well as the Zacks Consensus Estimate, both of which stood at 75 cents.
Including one-time items, the company reported earnings of 31 cents per share in the reported quarter compared with 85 cents in the prior-year quarter.
Operational Update
Owens-Illinois’ net sales inched up 1% year over year to $1.77 billion. Revenues, however, missed the Zacks Consensus Estimate of $1.82 billion. Modestly lower shipments and weakening currencies in Latin America offset higher prices, reflecting cost inflation and sales mix, and impact of a stronger Euro.
Owens-Illinois, Inc. Price, Consensus and EPS Surprise
Global sales shipments edged down 1% year over year in the second quarter. This decline largely resulted from the impact of external transportation strikes in Brazil and a raw material batch disruption in Mexico. The company’s joint venture with Constellation Brands, Inc. (STZ - Free Report) continues to perform well, reporting higher sales compared with prior year.
Cost of sales flared up 1.5% year over year to $1.43 billion. Gross profit remained flat, year over year, at $346 million. Selling and administrative expenses rose 2.4% year over year to $126 million. Segment operating profit inched up 1% year over year to $255 million. Segment operating profit margin remained flat year over year at 14.5%.
Financial Update
Owens-Illinois had cash and cash equivalents of $365 million at the end of the second quarter, up from $335 million witnessed at the end of the year-ago quarter. The company used $150 million of cash in operating activities during the six-month period ended Jun 30, 2018, compared with cash usage of $156 million reported in the comparable period last year. Owens-Illinois’ long-term debt decreased to $5.4 billion as of Jun 30, 2018, compared to $5.5 billion as of Jun 30, 2017.
Owens-Illinois launched its $400-million share repurchase program during first-quarter 2018. The company repurchased 2.7 million shares in the second quarter for approximately $50 million.
Guidance
The company maintained its adjusted earnings per share guidance range of $2.75-$2.85 for 2018. The mid-point of the range reflects a 6% year-over-year improvement. However, Owens-Illinois expects that the results are likely to be on the lower end of the range due to negative impact of foreign currency exchange rates.
Cash provided by continuing operating activities is expected to be approximately $800 million, whereas adjusted free cash flow will likely be around $400 million.
For third-quarter 2018, Owens-Illinois projects adjusted earnings per share to be around 75 cents. The company’s performance will benefit from solid improvement in business operations. Nonetheless, currency headwinds and lack of the energy credit in Europe will dampen its performance.
Share Price Performance
Over the past year, Owens-Illinois has underperformed its industry with respect to price performance. The stock has lost more than 31%, performing worse than the industry’s 26% decline during the same time frame.
Zacks Rank & Key Picks
Owens-Illinois currently carries a Zacks Rank #4 (Sell).
Actuant has a long-term earnings growth rate of 15.6%. Its shares have rallied 15%, over the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have appreciated 264% during the same time frame.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Owens-Illinois (OI) Q2 Earnings Top, Revenues Miss Estimates
Owens-Illinois, Inc. (OI - Free Report) reported second-quarter 2018 adjusted earnings of 77 cents per share, up 3% year over year. The reported figure came in ahead of the management guidance as well as the Zacks Consensus Estimate, both of which stood at 75 cents.
Including one-time items, the company reported earnings of 31 cents per share in the reported quarter compared with 85 cents in the prior-year quarter.
Operational Update
Owens-Illinois’ net sales inched up 1% year over year to $1.77 billion. Revenues, however, missed the Zacks Consensus Estimate of $1.82 billion. Modestly lower shipments and weakening currencies in Latin America offset higher prices, reflecting cost inflation and sales mix, and impact of a stronger Euro.
Owens-Illinois, Inc. Price, Consensus and EPS Surprise
Owens-Illinois, Inc. Price, Consensus and EPS Surprise | Owens-Illinois, Inc. Quote
Global sales shipments edged down 1% year over year in the second quarter. This decline largely resulted from the impact of external transportation strikes in Brazil and a raw material batch disruption in Mexico. The company’s joint venture with Constellation Brands, Inc. (STZ - Free Report) continues to perform well, reporting higher sales compared with prior year.
Cost of sales flared up 1.5% year over year to $1.43 billion. Gross profit remained flat, year over year, at $346 million. Selling and administrative expenses rose 2.4% year over year to $126 million. Segment operating profit inched up 1% year over year to $255 million. Segment operating profit margin remained flat year over year at 14.5%.
Financial Update
Owens-Illinois had cash and cash equivalents of $365 million at the end of the second quarter, up from $335 million witnessed at the end of the year-ago quarter. The company used $150 million of cash in operating activities during the six-month period ended Jun 30, 2018, compared with cash usage of $156 million reported in the comparable period last year. Owens-Illinois’ long-term debt decreased to $5.4 billion as of Jun 30, 2018, compared to $5.5 billion as of Jun 30, 2017.
Owens-Illinois launched its $400-million share repurchase program during first-quarter 2018. The company repurchased 2.7 million shares in the second quarter for approximately $50 million.
Guidance
The company maintained its adjusted earnings per share guidance range of $2.75-$2.85 for 2018. The mid-point of the range reflects a 6% year-over-year improvement. However, Owens-Illinois expects that the results are likely to be on the lower end of the range due to negative impact of foreign currency exchange rates.
Cash provided by continuing operating activities is expected to be approximately $800 million, whereas adjusted free cash flow will likely be around $400 million.
For third-quarter 2018, Owens-Illinois projects adjusted earnings per share to be around 75 cents. The company’s performance will benefit from solid improvement in business operations. Nonetheless, currency headwinds and lack of the energy credit in Europe will dampen its performance.
Share Price Performance
Over the past year, Owens-Illinois has underperformed its industry with respect to price performance. The stock has lost more than 31%, performing worse than the industry’s 26% decline during the same time frame.
Zacks Rank & Key Picks
Owens-Illinois currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the same industry include Installed Actuant Corporation and DMC Global Inc. (BOOM - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Actuant has a long-term earnings growth rate of 15.6%. Its shares have rallied 15%, over the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have appreciated 264% during the same time frame.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>