O-I Glass (OI) Tops Q3 EPS by 4c, Offers Guidance

O-I Glass (NYSE: OI) reported Q3 EPS of $0.63, $0.04 better than the analyst estimate of $0.59. Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.66 billion.

GUIDANCE:

O-I Glass sees Q4 2022 EPS of $0.28-$0.33, versus the consensus of $0.30.

• O-I expects fourth quarter 2022 adjusted earnings will range between $0.28 and $0.33 per share, an increase from prior guidance of between $0.20 and $0.30 per share. Results are expected to lag prior year adjusted earnings of $0.36 per share primarily due to an estimated $0.12 per share headwind from unfavorable foreign currency translation, impacts of divestitures and incremental interest expense for debt incurred to settle the Paddock 524 (g) trust. Results should reflect a higher net price, which will benefit from the recently implemented third price increase in Europe. Likewise, the company expects slightly lower sales volumes (in tons) given the strong 5.4 percent growth in the prior year period as well as current record low inventory levels and capacity constraints in key markets. Operating costs will be higher given incremental expense for expansion project activity which should be partially offset by benefits from the company’s ongoing Margin Expansion initiatives.
• The company is again improving its full year 2022 guidance compared to its most recent outlook shared during an investor conference in September. Management now expects adjusted earnings will range between $2.20 and $2.25 per share which is at the high end of prior guidance of between $2.10 and $2.25 per share. The updated range reflects favorable year-to-date results and solid momentum heading into the fourth quarter. Management has affirmed its cash flow outlook and expects adjusted free cash flow of at least $400 million and free cash flow of at least $200 million in 2022.
• O-I’s earnings outlook assumes foreign currency rates as of October 31, 2022, earnings dilution from the company’s Portfolio Optimization program, incremental interest expense for debt incurred to settle the Paddock 524(g) trust and an effective annual adjusted tax rate of approximately 25 to 28 percent. The free cash flow and adjusted free cash flow outlook excludes $618 million related to the funding of the Paddock 524(g) trust and related expenses which occurred in the third quarter of 2022.

For earnings history and earnings-related data on O-I Glass (OI) click here.

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