Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Owens-Illinois, Inc.’s (OI - Analyst Report) fourth-quarter 2012 adjusted earnings per share (EPS) of 40 cents were down 17% from the year-ago adjusted earnings of 48 cents per share, but up 8% from the Zacks Consensus Estimate of 37 cents. Weak economic conditions in Europe mainly hurt the quarterly results. The company was able to raise prices but global shipments dropped and scaled-back production in Europe led to increased costs for manufacturing and delivery.

 
On a reported basis, including one time items, the company posted a loss of 99 cents per share, narrower than the year-ago loss of $4.71.
 
Net sales dipped 4% to $1.748 billion in the quarter, surpassing the Zacks Consensus Estimate of $1.733 billion. Volume dipped 7% mainly due to lower demand in Europe, which offset strong growth in South America.
 
Operational Update
 
Manufacturing, shipping and delivery expense decreased 3% year over year to $1.47 billion in the quarter. Selling and administrative expenses increased 12% to $145 million. Operating profit dropped 18% year over year to $164 million. The decline in operating profit was attributable to lower global shipments and higher manufacturing and delivery costs, primarily due to production curtailment in Europe, which offset the positive effects of higher sales prices.
 
Fiscal 2012 Performance
 
Owens-Illinois reported adjusted EPS of $2.64 in fiscal 2012, up 9% from $2.43 in fiscal 2011 and ahead of the Zacks Consensus Estimate of $2.60. Including one-time items, EPS in the reported fiscal stood at $1.12, as against a loss of $3.06 in the year-ago period.
 
Revenues stood at $7 billion, down 5% from $7.36 billion in 2011 as higher prices were offset by unfavorable currency translation and a decline in volume. Persistent sluggish macroeconomic conditions in Europe were mainly responsible for the decline in volume. 
 
Financial Update
 
Cash and cash equivalents were $431 million as of 2012 end compared with $400 million as of 2011 end. Long-term debt decreased to $3,454 million as of 2012 end from $3,627 million as of 2011 end. Cash flow from operating activities was $575 million during 2012 compared with $503 million in 2011. Free cash flow generated during the year was $290 million, up more than 30% year over year. 
 
Owens-Illinois expects free cash flow to increase to $300 million in 2013, driven by improved operating results, benefiting from cost efficiency and restructuring programs, particularly in the second half of the year. 
 
Guidance
 
The company expects strong contribution from the emerging regions and stable market conditions in North America to support growth while macroeconomic uncertainty in Europe will remain a deterring factor. The company expects overall modest volume growth in 2013, and higher prices that keep pace with higher materials costs. Its global cost reduction initiatives and European asset optimization program is expected to benefit free cash flow and earnings. Adjusted earnings are expected in the range of $2.60 to $3.00 per share.
 
Owens-Illinois Inc. with its subsidiaries, is presently the largest manufacturer of glass containers in the world, The company has an esteemed clientele in the liquor and the non-alcoholic beverage categories. Owens-Illinois retains a Zacks Rank #3 (Hold). 
 
Peer Performance
 
Silgan Holdings Inc. (SLGN - Analyst Report) reported record adjusted EPS of $2.70 in fiscal 2012, up 3% from $2.63 in fiscal 2011 and a penny ahead of the Zacks Consensus Estimate. Crown Holdings Inc. (CCK - Analyst Report) reported EPS of $2.81 in fiscal 2012, flat year over year, and missed the Zacks Consensus Estimate of $2.84. Ball Corporation (BLL - Analyst Report) is yet to announce its fiscal 2012 results. The Zacks Consensus Estimate is at $3.08, projecting 12.7% year-over-year growth.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%