Key Highlights

  • Consensus EPS of 0.16 compares with a second-quarter loss of 6.33 per share, against a loss of 0.03 last year.
  • Consensus revenue of USD 1.64 billion compares with net sales of USD 1,668 million, a decrease of USD 38 million.
  • The company recorded a goodwill impairment charge of USD 873 million, a complete impairment of its Europe goodwill balance.
  • Gross profit was USD 214 million against USD 299 million, and selling and administrative expense was USD 75 million.

O-I Glass (NYSE:OI) reports third-quarter results on Tuesday, Oct. 27, after the market closes. Consensus stands at EPS of 0.16 on revenue of USD 1.64 billion, and the company has a market capitalization of USD 989.57 million.

O-I Glass is a glass container manufacturer. In the second quarter, it reported net sales of USD 1,668 million against USD 1,706 million and a net loss attributable to the company of USD 972 million against USD 5 million.

Estimates Against the Last Reported Quarter

The revenue estimate of USD 1.64 billion is below the USD 1,668 million of net sales reported for the second quarter. The EPS estimate of 0.16 is positive, while the reported figure was a loss of 6.33 per share against a loss of 0.03 a year earlier.

Net sales decreased USD 38 million, or approximately 2%, which the filing ties primarily to lower sales volumes, partly offset by slightly higher average selling prices and favorable foreign currency translation.

The Europe Goodwill Impairment

The company recorded a goodwill impairment charge of USD 873 million, equal to the excess of the Europe reporting unit's carrying value over its fair value. The charge is a complete impairment of Europe's goodwill balance.

The filing cites a significant reduction in the share price and lower projected earnings and cash flow from European operations. It describes softer demand and an increasingly competitive market that pressured price amid low capacity utilization, along with higher operating costs tied to recent plant restructuring actions in Europe.

Goodwill in the Latin America reporting unit was not impaired, and the filing says the remaining balance remains susceptible to future impairment charges.

Cost Lines and Restructuring Program

Cost of goods sold was USD 1,454 million against USD 1,407 million, and gross profit was USD 214 million against USD 299 million. Loss before income taxes was USD 827 million against earnings of USD 7 million, and the provision for income taxes was USD 138 million against USD 6 million.

Selling and administrative expense was USD 75 million against USD 106 million, and research, development and engineering expense was USD 9 million against USD 11 million. Net interest expense was USD 86 million against USD 85 million, and equity earnings were USD 29 million against USD 28 million.

The company has incurred cumulative charges of approximately USD 700 million under its Fit to Win program, and the filing says additional restructuring charges are expected in future quarters as management completes its assessment of redundant production capacity.

The estimates table lists a market capitalization of USD 989.57 million.

Markers for the Release

The loss per share against the 0.16 estimate and net sales against USD 1.64 billion are the headline comparisons. Other markers are gross profit against USD 214 million, restructuring charges and any update on Latin America goodwill.