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O-I Glass (OI) Earnings Beat, Revenues Miss Estimates in Q4
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O-I Glass, Inc. (OI - Free Report) reported fourth-quarter 2020 adjusted earnings of 40 cents per share, marking a 20% fall from the prior-year quarter. The bottom-line figure, however, surpassed the Zacks Consensus Estimate of 34 cents.
Including one-time items, the company reported loss per share of 18 cents in the quarter, as against the earnings per share of 20 cents posted in the prior-year quarter.
Operational Update
Revenues declined 8% year over year to $1,497 million during the December-end quarter. The top line declined on the Australia and New Zealand ("ANZ") businesses divestment. Revenues also missed the Zacks Consensus Estimate of $1,510 million.
Cost of sales was down 8.8% year over year to $1,232 million. Gross profit slid 4% year on year to $265 million. Selling and administrative expenses dropped 4% year over year to $95 million. Segment operating profit came in at $200 million in the reported quarter, down from the prior-year quarter’s $203 million.
Net sales in the Americas segment edged down 1.1% year over year to $880 million in the fourth quarter. Operating profit was up 10.4% year on year to $127 million.
Net sales in the Europe segment were $589 million in the reported quarter, up 6.5% year over year. The segment’s operating profit was up 5.8% year over year to $73 million.
Financial Update
O-I Glass had cash and cash equivalents of $563 million at the end of 2020, up from the $551 million witnessed at the end of 2019. The company generated $457 million of cash from operating activities in 2020 compared with the prior year’s $405 million. Its long-term debt reduced to $4.9 billion as of Dec 31, 2020, from $5.4 billion as of Dec 31, 2019.
Outlook
O-I Glass projects adjusted earnings per share for the ongoing year between $1.55 and $1.75. Moreover, the company expects to benefit from its cost-reduction initiatives to expand margins. These savings will likely offset the headwinds from the temporary cost-reduction efforts in 2020 to mitigate the impact of the pandemic. For the current quarter, the company anticipates adjusted earnings to lie between 32 cents and 37 cents per share.
Management expects capital expenditures of around $375 million and free cash flow of approximately $240 million for 2021. Also, O-I Glass anticipates suspension of all asbestos-related claims payments, pending final resolution of the Paddock Chapter 11.
Price Performance
Shares of the company have gained 3.6% over the past year, outperforming the industry’s growth of 0.9%.
Zacks Rank & Stocks to Consider
O-I Glass currently carries a Zacks Rank #3 (Hold).
AGCO Corporation has a projected earnings growth rate of 11.4% for the current year. Shares of the company have soared 83% over the past year.
Avery Dennison has an estimated earnings growth rate of 8.8% for 2021. The company’s shares have rallied 28% in a year’s time.
AptarGroup has an expected earnings growth rate of 14.4% for the ongoing year. Over the past year, the stock has gained 23%.
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O-I Glass (OI) Earnings Beat, Revenues Miss Estimates in Q4
O-I Glass, Inc. (OI - Free Report) reported fourth-quarter 2020 adjusted earnings of 40 cents per share, marking a 20% fall from the prior-year quarter. The bottom-line figure, however, surpassed the Zacks Consensus Estimate of 34 cents.
Including one-time items, the company reported loss per share of 18 cents in the quarter, as against the earnings per share of 20 cents posted in the prior-year quarter.
Operational Update
Revenues declined 8% year over year to $1,497 million during the December-end quarter. The top line declined on the Australia and New Zealand ("ANZ") businesses divestment. Revenues also missed the Zacks Consensus Estimate of $1,510 million.
Cost of sales was down 8.8% year over year to $1,232 million. Gross profit slid 4% year on year to $265 million. Selling and administrative expenses dropped 4% year over year to $95 million. Segment operating profit came in at $200 million in the reported quarter, down from the prior-year quarter’s $203 million.
OI Glass, Inc. Price, Consensus and EPS Surprise
OI Glass, Inc. price-consensus-eps-surprise-chart | OI Glass, Inc. Quote
Segmental Performance
Net sales in the Americas segment edged down 1.1% year over year to $880 million in the fourth quarter. Operating profit was up 10.4% year on year to $127 million.
Net sales in the Europe segment were $589 million in the reported quarter, up 6.5% year over year. The segment’s operating profit was up 5.8% year over year to $73 million.
Financial Update
O-I Glass had cash and cash equivalents of $563 million at the end of 2020, up from the $551 million witnessed at the end of 2019. The company generated $457 million of cash from operating activities in 2020 compared with the prior year’s $405 million. Its long-term debt reduced to $4.9 billion as of Dec 31, 2020, from $5.4 billion as of Dec 31, 2019.
Outlook
O-I Glass projects adjusted earnings per share for the ongoing year between $1.55 and $1.75. Moreover, the company expects to benefit from its cost-reduction initiatives to expand margins. These savings will likely offset the headwinds from the temporary cost-reduction efforts in 2020 to mitigate the impact of the pandemic. For the current quarter, the company anticipates adjusted earnings to lie between 32 cents and 37 cents per share.
Management expects capital expenditures of around $375 million and free cash flow of approximately $240 million for 2021. Also, O-I Glass anticipates suspension of all asbestos-related claims payments, pending final resolution of the Paddock Chapter 11.
Price Performance
Shares of the company have gained 3.6% over the past year, outperforming the industry’s growth of 0.9%.
Zacks Rank & Stocks to Consider
O-I Glass currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Industrial Products sector include AGCO Corporation (AGCO - Free Report) , Avery Dennison Corporation (AVY - Free Report) and AptarGroup, Inc. (ATR - Free Report) . While AGCO Corporation currently sports a Zacks Rank #1 (Strong Buy), Avery Dennison and AptarGroup carry a Zacks Rank of 2.You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO Corporation has a projected earnings growth rate of 11.4% for the current year. Shares of the company have soared 83% over the past year.
Avery Dennison has an estimated earnings growth rate of 8.8% for 2021. The company’s shares have rallied 28% in a year’s time.
AptarGroup has an expected earnings growth rate of 14.4% for the ongoing year. Over the past year, the stock has gained 23%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>