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O-I Glass, Inc. (OI - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 12 cents, which beat the Zacks Consensus Estimate of 3 cents. The bottom line was also higher than the company’s guidance of 3 cents. On a year-over-year basis, earnings decreased 68%.
Including one-time items, O-I Glass reported a loss of $3.05 for the quarter against earnings of 8 cents in the prior-year quarter.
Operational Update
Revenues were $1.64 billion for the quarter under review, down 3.1% from the year-ago quarter. However, the top line surpassed the Zacks Consensus Estimate of $1.63 billion. The downside was driven by lower sales volume, partially offset by higher average selling prices and favorable foreign currency translation.
Cost of sales was down 1.7% year over year to $1.41 billion. Gross profit decreased 10.8% year over year to $231 million. The gross margin was 14.1% for the quarter under review compared with 15.3% in the prior-year quarter. Selling and administrative expenses were down 7.9% year over year to $116 million.
Adjusted segment operating profit amounted to $168 million for the reported quarter, down from the prior-year period’s $206 million. The segment operating margin was 10.2% compared with the prior-year quarter’s 12.2%.
Net sales in the Americas segment dipped 1.6% year over year to $922 million for the fourth quarter. We expected net sales of $876 million for the quarters. Operating profit was up 12% year over year to $93 million. Our estimate was $58 million.
Net sales in the Europe segment were $689 million for the reported quarter, down 4.8% year over year. Our estimate for the segment’s net sales was $746 million. The segment’s operating profit fell 39% year over year to $75 million due to lower shipment levels and significantly higher operating costs. We expected the segment's operating profit to be $85 million for the quarter.
Financial Update
O-I Glass had cash and cash equivalents of $913 million at the end of Dec 31, 2023, up from the $773 million at 2022-end. The company generated $381 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $378 million.
OI’s long-term debt was $4.69 billion as of Dec 31, 2023, up from $4.37 billion as of Dec 31, 2022.
2023 Performance
For 2023, O-I Glass’ adjusted earnings were $3.09, which surpassed the Zacks Consensus Estimate of $3. It also marked a 34% improvement from last year, driven by higher average selling prices and favorable foreign currency translation. These were offset by lower sales volume due to elevated inventory destocking. OI expected adjusted earnings per share of around $3.00.
Including one-time items, the company reported a loss of 67 cents per share for 2023 against earnings of $3.67 in 2022.
Total revenues advanced 3.6% year over year to $7.11 billion, surpassing the Zacks Consensus Estimate of $7.09 billion.
Outlook
O-I Glass expects adjusted earnings of $2.25-$2.65 per share. Sales volume growth (in tons) is projected to rise in the low-single to mid-single digits. OI expects 2024 free cash flow to be $150-$200 million.
Price Performance
Shares of the company have lost 35.6% over the past year compared with the industry’s fall of 26.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
O-I Glass currently has a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 49.2% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.
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O-I Glass (OI) Q4 Earnings & Revenues Beat Estimates, Dip Y/Y
O-I Glass, Inc. (OI - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 12 cents, which beat the Zacks Consensus Estimate of 3 cents. The bottom line was also higher than the company’s guidance of 3 cents. On a year-over-year basis, earnings decreased 68%.
Including one-time items, O-I Glass reported a loss of $3.05 for the quarter against earnings of 8 cents in the prior-year quarter.
Operational Update
Revenues were $1.64 billion for the quarter under review, down 3.1% from the year-ago quarter. However, the top line surpassed the Zacks Consensus Estimate of $1.63 billion. The downside was driven by lower sales volume, partially offset by higher average selling prices and favorable foreign currency translation.
Cost of sales was down 1.7% year over year to $1.41 billion. Gross profit decreased 10.8% year over year to $231 million. The gross margin was 14.1% for the quarter under review compared with 15.3% in the prior-year quarter. Selling and administrative expenses were down 7.9% year over year to $116 million.
Adjusted segment operating profit amounted to $168 million for the reported quarter, down from the prior-year period’s $206 million. The segment operating margin was 10.2% compared with the prior-year quarter’s 12.2%.
O-I Glass, Inc. Price, Consensus and EPS Surprise
O-I Glass, Inc. price-consensus-eps-surprise-chart | O-I Glass, Inc. Quote
Segmental Performances
Net sales in the Americas segment dipped 1.6% year over year to $922 million for the fourth quarter. We expected net sales of $876 million for the quarters. Operating profit was up 12% year over year to $93 million. Our estimate was $58 million.
Net sales in the Europe segment were $689 million for the reported quarter, down 4.8% year over year. Our estimate for the segment’s net sales was $746 million. The segment’s operating profit fell 39% year over year to $75 million due to lower shipment levels and significantly higher operating costs. We expected the segment's operating profit to be $85 million for the quarter.
Financial Update
O-I Glass had cash and cash equivalents of $913 million at the end of Dec 31, 2023, up from the $773 million at 2022-end. The company generated $381 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $378 million.
OI’s long-term debt was $4.69 billion as of Dec 31, 2023, up from $4.37 billion as of Dec 31, 2022.
2023 Performance
For 2023, O-I Glass’ adjusted earnings were $3.09, which surpassed the Zacks Consensus Estimate of $3. It also marked a 34% improvement from last year, driven by higher average selling prices and favorable foreign currency translation. These were offset by lower sales volume due to elevated inventory destocking. OI expected adjusted earnings per share of around $3.00.
Including one-time items, the company reported a loss of 67 cents per share for 2023 against earnings of $3.67 in 2022.
Total revenues advanced 3.6% year over year to $7.11 billion, surpassing the Zacks Consensus Estimate of $7.09 billion.
Outlook
O-I Glass expects adjusted earnings of $2.25-$2.65 per share. Sales volume growth (in tons) is projected to rise in the low-single to mid-single digits. OI expects 2024 free cash flow to be $150-$200 million.
Price Performance
Shares of the company have lost 35.6% over the past year compared with the industry’s fall of 26.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
O-I Glass currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , AZZ Inc. (AZZ - Free Report) , and Applied Industrial Technologies (AIT - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), and AZZ and AIT carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 49.2% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.