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Going into 2014, officials at Libbey Inc. had cautioned investors that the year’s first quarter was likely to trail the company’s record 2013 performance. That came to bear on Thursday, and the results were even more disappointing than expected.
Late-winter storms, higher input costs, and currency fluctuations all dragged on the bottom line for the Toledo-based glassware producer. The weather was particularly troublesome, with snowstorms interrupting production in Toledo, keeping consumers away from retailers and restaurants, and increasing Libbey’s natural gas costs by $2 million over last year. Sales were nearly flat, falling 1 percent to $182 million.
That all translated to a loss of $3.4 million, or 16 cents per share, for the quarter. Last year Libbey reported a profit of $2 million, or 9 cents per share, in the first quarter.
On an adjusted basis, Libbey said it earned 12 cents per share, missing analysts’ estimates of 26 cents per share.
Investors didn’t like the news, driving Libbey’s share price down by more than 9 percent in early trading. Shares recovered some to close the day at $24.81, down about 7 percent.
Still, Libbey remains committed to the full-year financial expectations it outlined earlier this year. The company expects slight growth in sales and continued improvement in its adjusted EBITDA (earnings before income, taxes, depreciation, and amortization) margins.
Officials also said Thursday that the production realignment to shift work from Louisiana to plants in Mexico and Toledo that the company undertook early last year is complete. CEO Stephanie Streeter said that provided about $1 million in savings in the first quarter and should result in savings of another $6 million for the rest of the year.
Though Libbey expects some weakness in retail sales in the United States and Canada for the rest of the year, officials believe they’ll see some growth in Mexico and Latin America. They also anticipate modest revenue growth in their food service and business-to-business segments.
“In spite of the weather issues and higher input costs that we experienced during the first quarter, we believe the long-term drivers of our business model remain strong,” Ms. Streeter said.