O-I Glass, Inc. ( OI Quick Quote OI - Free Report) reported second-quarter 2021 adjusted earnings of 54 cents per share compared with the prior-year quarter’s 1 cent per share. The bottom line surpassed the Zacks Consensus Estimate of 47 cents and exceeded management’s guidance of earnings between 45 cents and 50 cents. The upbeat results resulted from improved sales and production volumes as well as solid operating and cost performance. Including one-time items, the company reported earnings per share of 73 cents in the quarter, against the loss per share of 64 cents posted in the prior-year quarter. Operational Update
Revenues improved 17% year over year to $1,660 million during the June-end quarter. Excluding the impact of recent divestitures, sales volume was up 18% from the prior-year period. The top line also surpassed the Zacks Consensus Estimate of $1,570 million.
Cost of sales was up 8% year over year to $1,354 million. Gross profit jumped a whopping 88% year on year to $306 million. Selling and administrative expenses flared up 19.5% year over year to $116 million. Segment operating profit amounted to $232 million in the reported quarter, up from the prior-year quarter’s $99 million. Segmental Performance
Net sales in the Americas segment grew 23% year over year to $890 million in the second quarter. Operating profit surged 138% year on year to $124 million.
Net sales in the Europe segment were $745 million in the reported quarter, up 34% year over year. The segment’s operating profit soared 157% year over year to $108 million. Financial Update
O-I Glass had cash and cash equivalents of $531 million at the end of the second quarter of 2021, down from the $1,067 million witnessed at the end of the prior year quarter. The company generated $199 million of cash from operating activities in the second quarter of 2021 compared with the prior-year quarter’s $181 million. Its long-term debt was at $5 billion as of Jun 30, 2021, down from $6 billion as of Jun 30, 2020.
O-I Glass now projects adjusted earnings per share to lie between $1.65 and $1.75 for the ongoing year. It expects to generate free cash flow of $260 million in 2021.
For the current quarter, the company anticipates adjusted earnings between 47 cents and 52 cents per share. Higher selling prices are expected to offset cost inflation. It expects 8-10% production volume improvement from the prior-year quarter. The benefit of higher production will likely offset higher maintenance and asset project activity expenses. The current year’s results will also reflect cost savings from the company’s Margin Expansion initiatives. Price Performance
Shares of the company have gained 30.9% over the past year, as against the
industry’s decline of 12.6%. Image Source: Zacks Investment Research Zacks Rank & Stocks to Consider
O-I Glass currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Industrial Products sector include Greif, Inc. ( GEF Quick Quote GEF - Free Report) , Lindsay Corp. ( LNN Quick Quote LNN - Free Report) and Pentair ( PNR Quick Quote PNR - Free Report) . While Greif and Lindsay sport a Zacks Rank #1 (Strong Buy), Pentair carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Greif has an anticipated earnings growth rate of 47.2% for fiscal 2021. The company’s shares have gained 29.9%, in the past year. Lindsay has an estimated earnings growth rate of 1% for the ongoing fiscal year. In a year's time, the company’s shares have rallied 22.3%. Pentair has a projected earnings growth rate of 26% for 2021. The stock has appreciated 36.7%, over the past year.