O-I REPORTS IMPROVED SECOND QUARTER 2012 RESULTS FROM PRIOR YEAR
(Thomson Reuters ONE) -
O-I REPORTS IMPROVED SECOND QUARTER 2012 RESULTS FROM PRIOR YEAR
North American region drives strong year-over-year profit improvement
PERRYSBURG, Ohio (July 25, 2012) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the second quarter ending June 30, 2012.
Highlights
* Earnings: O-I reported second quarter 2012 earnings from continuing
operations attributable to the Company of $0.81 per share (diluted),
compared to $0.42 per share (diluted) for the same period of the prior year.
Adjusted net earnings (non-GAAP) were $0.81 per share, compared to $0.59 per
share in the second quarter of 2011.
* North American region delivers strong performance: The Company's North
American region delivered strong year-over-year improvement and drove higher
global segment operating profit.
* Lower adjusted earnings expected in third quarter: Lower expected European
sales and production levels, as well as unfavorable foreign currency
exchange rate trends in most regions, will likely drive the Company's
adjusted earnings below the prior year in the third quarter.
* Free cash flow outlook remains solid: The Company is committed to generating
higher levels of cash and now expects at least $250 million of free cash
flow in 2012, compared to $220 million in 2011.
Second quarter net sales were $1.766 billion in 2012, down from $1.959 billion
in the prior year second quarter, primarily due to unfavorable foreign currency
translation. Higher pricing in the second quarter was offset by sales volumes
that were lower than the prior year quarter.
Net earnings from continuing operations attributable to the Company in the
second quarter of 2012 were $134 million, or $0.81 per share (diluted), compared
with net earnings from continuing operations in the second quarter of the prior
year of $71 million, or $0.42 per share (diluted). Adjusted net earnings (non-
GAAP) also were $134 million, or $0.81 per share (diluted), in the second
quarter of 2012 as there were no items management considers not representative
of ongoing operations. These results compared with second quarter 2011 adjusted
net earnings of $98 million, or $0.59 per share (diluted). A description of
items in 2011 that management considers not representative of ongoing operations
are listed in Note 1.
Commenting on the Company's second quarter, Chairman and Chief Executive Officer
Al Stroucken said,
"Earnings improved significantly from the prior year second quarter due to a
strong operating performance and positive results from our pricing strategy. Our
North American region led the profit improvement this quarter as it successfully
eliminated the manufacturing and supply chain inefficiencies experienced in
2011 and re-established itself as a high performing region."
Operational Highlights
O-I reported second quarter 2012 segment operating profit of $266 million, up
from $224 million in the second quarter of 2011. Strong manufacturing and supply
chain performance, as well as cost-cutting initiatives, benefited second quarter
2012 earnings by $49 million from the prior year second quarter. Further, higher
sales prices offset the impact of cost inflation and lower global shipments,
which were down approximately six percent (in tonnes) from the prior year second
quarter. This decrease was largely driven by lower wine bottle sales in southern
Europe, where challenging economic conditions continue to impact shipment
levels. To balance capacity with lower demand in Europe, the Company implemented
production curtailment measures in the second quarter. Further, global segment
profit was impacted by $23 million of unfavorable foreign currency translation
in the second quarter of 2012.
Corporate costs were $14 million higher in the second quarter of 2012, primarily
due to lower machine and equipment sales than in the prior year quarter and
higher incentive compensation costs.
Financial highlights
The Company reported total debt of $4.019 billion and cash of $336 million at
June 30, 2012. Net debt was $3.683 billion, a decrease of $148 million from the
first quarter of 2012 and $397 million lower than the second quarter of 2011.
The decrease in net debt from the first quarter of 2012 was primarily due to
approximately $92 million of favorable impact from foreign currency translation,
as well as $49 million of free cash flow. O-I's leverage ratio was 2.8 times net
debt to EBITDA at the end of the second quarter, a decrease from 3.2 times at
the prior year second quarter. Available liquidity under the Company's global
revolving credit facility was $807 million as of June 30, 2012.
Asbestos-related cash payments during the second quarter and first six months of
2012 were $28 million and $58 million, respectively, compared to $35 million and
$68 million in the same periods of the prior year.
Business outlook
Commenting on the Company's business outlook, Stroucken said, "Year-over-year
operating performance in Asia Pacific should improve in the third quarter, and
profitability is expected to remain strong in the Americas. However, we expect
continued challenging market conditions in Europe. We have taken actions to
balance our production with lower demand in Europe, and this will likely lead to
lower third quarter 2012 adjusted earnings on a year-over-year basis. In
addition, unfavorable foreign currency exchange rate trends also will impact
year-over-year adjusted earnings for the remainder of the year. To maximize our
financial flexibility during this period of macroeconomic uncertainty, we have
reduced our capital spending plan for the remainder of the year. We now expect
at least $250 million of free cash flow in 2012."
Note 1:
The table below describes the items that management considers not representative
of ongoing operations.
$ Millions, except per-share amounts Three months ended June 30
--------------------------------
2012 2011
---------------- ---------------
Earnings EPS Earnings EPS
---------------- ---------------
Earnings from Continuing Operations $134 $0.81 $71 $0.42
Attributable to the Company
Items that management considers not
representative of ongoing operations
consistent with Segment Operating Profit
Charges for note repurchase premiums and 24 0.15
write-off of finance fees 3 0.02
Charges for restructuring
Adjusted Net Earnings $134 $0.81 $98 $0.59
$ Millions, except per-share amounts Six months ended June 30
--------------------------------
2012 2011
---------------- ---------------
Earnings EPS Earnings EPS
---------------- ---------------
Earnings from Continuing Operations $256 $1.54 $154 $0.92
Attributable to the Company
Items that management considers not
representative of ongoing operations
consistent with Segment Operating Profit
Charges for note repurchase premiums and
write-off of finance fees 24 0.15
Charges for restructuring 8 0.05
Adjusted Net Earnings $256 $1.54 $186 $1.12
Company profile
Owens-Illinois, Inc. (NYSE: OI) is the world's largest glass container
manufacturer and preferred partner for many of the world's leading food and
beverage brands. With revenues of $7.4 billion in 2011, the Company is
headquartered in Perrysburg, Ohio, USA, and employs more than 24,000 people at
81 plants in 21 countries. O-I delivers safe, effective and sustainable glass
packaging solutions to a growing global marketplace. For more information, visit
www.o-i.com.
Regulation G
The information presented above regarding adjusted net earnings relates to net
earnings attributable to the Company exclusive of items management considers not
representative of ongoing operations and does not conform to U.S. generally
accepted accounting principles (GAAP). It should not be construed as an
alternative to the reported results determined in accordance with GAAP.
Management has included this non-GAAP information to assist in understanding the
comparability of results of ongoing operations. Management uses this non-GAAP
information principally for internal reporting, forecasting, budgeting and
calculating bonus payments. Further, the information presented above regarding
free cash flow does not conform to GAAP. Management defines free cash flow as
cash provided by continuing operating activities less capital spending (both as
determined in accordance with GAAP) and has included this non-GAAP information
to assist in understanding the comparability of cash flows. Management uses this
non-GAAP information principally for internal reporting, forecasting and
budgeting. Management believes that the non-GAAP presentation allows the board
of directors, management, investors and analysts to better understand the
Company's financial performance in relationship to core operating results and
the business outlook.
The Company routinely posts important information on its website - www.o-
i.com/investors.
Forward looking statements
This news release contains "forward looking" statements within the meaning of
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. Forward looking statements reflect the Company's current
expectations and projections about future events at the time, and thus involve
uncertainty and risk. The words "believe," "expect," "anticipate," "will,"
"could," "would," "should," "may," "plan," "estimate," "intend," "predict,"
"potential," "continue," and the negatives of these words and other similar
expressions generally identify forward looking statements. It is possible the
Company's future financial performance may differ from expectations due to a
variety of factors including, but not limited to the following: (1) foreign
currency fluctuations relative to the U.S. dollar, specifically the Euro,
Brazilian real and Australian dollar, (2) changes in capital availability or
cost, including interest rate fluctuations, (3) the general political, economic
and competitive conditions in markets and countries where the Company has
operations, including uncertainties related to the economic conditions in Europe
and Australia, the expropriation of the Company's operations in Venezuela,
disruptions in capital markets, disruptions in the supply chain, competitive
pricing pressures, inflation or deflation, and changes in tax rates and laws,
(4) consumer preferences for alternative forms of packaging, (5) fluctuations in
raw material and labor costs, (6) availability of raw materials, (7) costs and
availability of energy, including natural gas prices, (8) transportation costs,
(9) the ability of the Company to raise selling prices commensurate with energy
and other cost increases, (10) consolidation among competitors and customers,
(11) the ability of the Company to acquire businesses and expand plants,
integrate operations of acquired businesses and achieve expected synergies, (12)
unanticipated expenditures with respect to environmental, safety and health
laws, (13) the performance by customers of their obligations under purchase
agreements, (14) the Company's ability to further develop its sales, marketing
and product development capabilities, (15) the Company's success in implementing
necessary restructuring plans and the impact of such restructuring plans on the
carrying value of recorded goodwill, (16) the Company's ability to successfully
navigate the structural changes in Australia, and (17) the timing and occurrence
of events which are beyond the control of the Company, including any
expropriation of the Company's operations, floods and other natural disasters,
and events related to asbestos-related claims. It is not possible to foresee or
identify all such factors. Any forward looking statements in this document are
based on certain assumptions and analyses made by the Company in light of its
experience and perception of historical trends, current conditions, expected
future developments, and other factors it believes are appropriate in the
circumstances. Forward looking statements are not a guarantee of future
performance and actual results or developments may differ materially from
expectations. While the Company continually reviews trends and uncertainties
affecting the Company's results of operations and financial condition, the
Company does not assume any obligation to update or supplement any particular
forward looking statements contained in this news release.
Conference call scheduled for July 26, 2012
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a conference call to
discuss the Company's latest results on Thursday, July 26, 2012, at 8:30 a.m.,
Eastern Time. A live webcast of the conference call, including presentation
materials, will be available on the O-I website, www.o-i.com/investors, in the
Presentations & Webcast section.
The conference call also may be accessed by dialing 888-733-1701 (U.S. and
Canada) or 706-634-4943 (international) by 8:20 a.m., Eastern Time, on July 26.
Ask for the O-I conference call. A replay of the call will be available on the
O-I website, www.o-i.com/investors, for 90 days following the call.
Contacts: O-I, Erin Crandall, 567-336-2355 - Investor Relations
O-I, Stephanie Johnston, 567-336-7199 - Corporate Communications
Copies of O-I news releases are available on the O-I website at www.o-i.com.
O-I's third quarter 2012 earnings conference call is currently scheduled for
Thursday, October 25, 2012, at 8:30 a.m., Eastern Time.
# # #
O-I 2Q12 Earnings Tables:
http://hugin.info/150659/R/1629434/521881.pdf
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other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Owens-Illinois, Inc. via Thomson Reuters ONE
[HUG#1629434]
Unternehmensinformation / Kurzprofil:
Datum: 25.07.2012 - 22:06 Uhr
Sprache: Deutsch
News-ID 168849
Anzahl Zeichen: 16468
contact information:
Town:
Perrysburg, OH
Kategorie:
Business News
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