O-I Glass' (OI) Q2 Earnings & Revenues Dip Y/Y on Low Demand
O-I Glass, Inc. OI reported second-quarter 2020 adjusted earnings of 1 cent per share, marking a 98.6% plunge from the prior-year quarter. The Zacks Consensus Estimate for the quarter was break-even earnings per share.
Including one-time items, the company reported loss per share of 64 cents in the quarter, as against the earnings per share of 42 cents recorded in the prior-year quarter.
Operational Update
Revenues declined 19.2% year over year to $1,418 million in the June-end quarter and also missed the Zacks Consensus Estimate of $1,438 million. Lower shipments due to the pandemic hurt sales by $255 million, while foreign-currency translation reduced net sales by $88 million.
Cost of sales was down 11.6% year over year to $1,255 million. Gross profit plummeted 51.5% year over year to $163 million. Selling and administrative expenses was down 16.4% year over year to $97 million. Segment operating profit was $95 million in the reported quarter, down from the prior-year quarter’s $236 million.
OI Glass, Inc. Price, Consensus and EPS Surprise
OI Glass, Inc. price-consensus-eps-surprise-chart | OI Glass, Inc. Quote
Segmental Performance
Net sales in the Americas segment declined 22.5% year over year to $724 million in second-quarter 2020. Operating profit slumped 63.8% year over year to $52 million.
Net sales in the Europe segment were $555 million in the quarter, down 14.6% year over year. The segment’s operating profit plummeted 53.3% year over year to $42 million.
Net sales in the Asia Pacific region dipped 13.2% year over year to $132 million during the June-end quarter. Operating profit plunged 50% year over year to $1 million.
Financial Update
O-I Glass had cash and cash equivalents of $1,067 million at the end of the second quarter, up from $371 million at the end of the prior-year quarter. The company generated $181 million of cash from operating activities in the reported quarter compared with cash utilization of $67 million in the prior-year quarter. Its long-term debt rose to $6.5 billion as of Jun 30, 2020, from $6.3 billion as of Jun 30, 2019. The company recently completed the sale of Australia and New Zealand (ANZ) operation to optimize its business structure and reduce debt.
Outlook
Given the recent favorable market trends, the company expects current-year sales volume to be down 4-7% compared with the previous guidance of a 5-10% decline. O-I Glass anticipates third-quarter sales volume to be approximately flat to slightly down compared with the prior-year period.
Price Performance
Over the past three months, shares of O-I Glass have appreciated 60.6% outperforming the industry’s growth of 34.7%
Zacks Rank and Stocks to Consider
O-I Glass currently carries a Zacks Rank #5 (Strong Sell).
A few better-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. SLGN, IIVI Incorporated IIVI and Energous Corporation WATT. While Silgan and IIVI sport a Zacks Rank #1 (Strong Buy), Energous carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Silgan has a projected earnings growth rate of 31.5% for the current year. The company’s shares have gained 13.1% in the past three months.
IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 46% in three months’ time.
Energous has an expected earnings growth rate of 44% for 2020. The stock has soared 252.6% over the past three months.
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