Yahoo Finance O-I Glass (OI) Beats Q1 Earnings Estimates, Lowers '24 Outlook
O-I Glass, Inc. OI reported first-quarter 2024 earnings per share of 45 cents, which beat the Zacks Consensus Estimate of 36 cents. On a year-over-year basis, earnings plunged 65%, reflecting lower volumes due to weak consumer demand and inventory destocking across the value chain.
Operational Update
Revenues were $1.59 billion for the quarter under review, down 13% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $1.71 billion. The downside was driven by lower segmental operating profit and higher interest expenses.
Cost of sales was down 5.3% year over year to $1.28 billion. Gross profit decreased 34.3% year over year to $318 million. The gross margin was 20% for the quarter under review compared with 26.4% in the prior-year quarter. Selling and administrative expenses were down 16.3% year over year to $123 million.
Adjusted segment operating profit amounted to $235 million for the reported quarter, down from the prior-year period’s $398 million. The segmental operating margin was 14.8% compared with the prior-year quarter’s 21.7%.
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 14.6% year over year to $854 million for the first quarter. We expected net sales of $960 million for the quarter. Operating profit was down 42% year over year to $102 million. Our estimate was $98 million. The downside is due to lower net price and lower sales volume.
Net sales in the Europe segment were $709 million for the reported quarter, down 11.3% year over year. Our estimate for the segment’s net sales was $726 million. The segment’s operating profit fell 40.1% year over year to $133 million due to lower sales volume and significantly higher operating costs. We expected the segment's operating profit to be $123 million for the quarter.
Financial Update
O-I Glass had cash and cash equivalents of $395 million at the end of Mar 31, 2024, down from the $913 million at 2023-end. The company used $270 million of cash in operating activities in the quarter under review compared with the prior-year quarter’s $193 million.
OI’s long-term debt was $4.12 billion as of Mar 31, 2024, down from $4.7 billion as of Dec 31, 2023.
Outlook
Due to the headwinds faced in the first quarter of 2024, OI lowered its projection for 2024. It expects adjusted earnings of $1.50-$2.00 per share, down from previously stated $2.25-$2.65. Sales volume (in tons) is projected to be flat to up in the low-single digits. OI expects the 2024 free cash flow to be $100-$150 million.
Price Performance
Shares of the company have lost 32.3% over the past year compared with the industry’s fall of 31.4%.
Image Source: Zacks Investment Research
Zacks Rank
O-I Glass currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Packaging Stocks
AptarGroup, Inc. ATR reported a first-quarter 2024 adjusted EPS of $1.26, beating the Zacks Consensus Estimate of $1.13. The bottom line increased 31% from 95 cents (including comparable exchange rates) per share in the year-ago quarter, aided by strong sales growth in the Pharma business, and continued margin expansion in the Beauty and Closures businesses.
AptarGroup’s total revenues increased 6.4% year over year to $915 million, surpassing the Zacks Consensus Estimate of $897 million. Core sales, excluding currency and acquisition effects, improved 5% year over year.
Sonoco Products Co. SON reported an adjusted EPS of $1.12 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.08. The bottom line fell 20% from the prior-year quarter as gains from improved productivity were offset by price/cost pressures and lower volumes.
Sonoco’s net sales were $1.64 billion, which fell short of the consensus estimate of $1.69 billion. The top line fell 5.3% year over year on lower volumes and pricing, somewhat offset by acquisitions.
Packaging Corporation of America PKG reported an adjusted EPS of $1.72 in the first quarter of 2024, beating the Zacks Consensus Estimate of $1.63. The bottom line dipped 22% year over year mainly due to lower prices and mix in the Packaging and Paper segments. These were partially offset by higher volumes in the Packaging and Paper segments.
PKG’s sales in the quarter rose 0.2% year over year to $1.98 billion. The top line surpassed the Zacks Consensus Estimate of $1.91 billion.
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