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Why Is O-I Glass (OI) Down 1.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is O-I Glass due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
O-I Glass 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%.
Segment 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -24.21% due to these changes.
VGM Scores
Currently, O-I Glass has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise O-I Glass has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is O-I Glass (OI) Down 1.2% Since Last Earnings Report?
A month has gone by since the last earnings report for O-I Glass (OI - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is O-I Glass due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
O-I Glass Q4 Earnings & Revenues Beat Estimates, Dip Y/Y
O-I Glass 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%.
Segment 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -24.21% due to these changes.
VGM Scores
Currently, O-I Glass has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise O-I Glass has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.