On July 30, 2024, O-I Glass Inc (OI, Financial) released its 8-K filing for the second quarter ended June 30, 2024. O-I Glass, the world's largest manufacturer of glass bottles, reported financial results that fell short of analyst expectations. The company generates 70% of its revenue from outside the United States, with a significant presence in Europe, North America, and Brazil. Beer remains the primary end market for O-I's glass bottles, which are also used for wine, soda, spirits, condiments, and food.
Performance and Challenges
O-I Glass Inc (OI, Financial) reported net earnings attributable to the company of $0.36 per share (diluted) for Q2 2024, down from $0.69 per share (diluted) in the same period last year. Adjusted earnings were $0.44 per share (diluted), compared to $0.88 per share (diluted) in Q2 2023. The company faced a decline in net sales to $1.7 billion, a decrease from $1.9 billion in the prior year period. This decline was driven by 2% lower average selling prices, a 4.5% decline in sales volume (in tons), and slightly unfavorable foreign currency translation.
Financial Achievements
Despite the challenges, O-I Glass Inc (OI, Financial) achieved a segment operating profit of $233 million in Q2 2024, down from $326 million in Q2 2023. The company also reported lower retained corporate and other costs of $32 million, compared to $54 million in the prior year period, due to reduced corporate spending and management incentives. Net interest expense decreased to $87 million from $118 million, reflecting lower refinancing charges.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1.7 billion | $1.9 billion |
| Net Earnings Per Share (Diluted) | $0.36 | $0.69 |
| Adjusted Earnings Per Share (Diluted) | $0.44 | $0.88 |
| Segment Operating Profit | $233 million | $326 million |
CEO Commentary
"It is a privilege to be O-I’s new CEO. I have spent my career serving the food and beverage industries across the world. I have always appreciated the role of glass packaging in food safety and brand building. O-I does more than make glass. We help our customers create millions of moments of enjoyment for countless consumers every day. Having served on O-I’s Board of Directors since 2015 and named CEO in May, I see a clear path to make O-I a more valuable company by being safer, more competitive and closer to our customers," said Gordon Hardie, O-I Glass CEO.
Analysis and Outlook
O-I Glass Inc (OI, Financial) has adjusted its full-year guidance to reflect softer than expected demand and rapid inventory control efforts. The company now expects adjusted earnings per share for FY24 to be between $1.00 and $1.25, down from the previous estimate of $1.50 to $2.00. Free cash flow is projected to be between $50 million and $100 million, reflecting changes in business outlook and anticipated restructuring activities.
O-I Glass Inc (OI, Financial) continues to face challenges from sluggish consumer consumption and inventory management practices. However, the company anticipates year-over-year sales volume growth in the second half of 2024 and stronger future earnings as it implements its "Fit To Win" program aimed at increasing competitiveness and value creation.
For more detailed financial information and analysis, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from O-I Glass Inc for further details.
