Libbey warns of local layoffs, lower earnings

3/21/2001

Toledo's Libbey, Inc., expects an undetermined number of temporary layoffs at its 1,200-employee Ash Street factory and elsewhere over the next few months primarily because of weak sales of glassware items to retailers and candle makers.

Libbey's first-quarter earnings won't meet Wall Street expectations but should be 24 to 28 cents a share, the tabletop glassware and dishware company warned yesterday. A consensus of five analysts had put Libbey's first-quarter earnings at 42 cents a share, according to First Call/Thomson Financial.

The announcement apparently was not well received by investors. firm's stock price took a hit yesterday, closing at 4 p.m. at $30 a share on the New York Stock Exchange, down $1.50.

Libbey expects a profit of $3.10 to $3.20 a share this year, which is lower than the $3.24 a share that six analysts polled by First Call/Thomson Financial predicted but higher than the $3.01 a share it posted in 2000. Annual sales should be $450 million to $460 million, up from $442 million last year, according to the company.

“It's our expectation and our hope that sales will pick up later in the year,” said Kenneth Wilkes, Libbey's chief financial officer. “We're still hopeful for a good year in terms of ... earnings growth for the whole year.”

Weak sales coupled with higher natural gas costs is prompting Libbey to curtail production at its three U.S. glass factories, including the one in Toledo, and with its Mexican joint venture. The cuts will hurt Libbey's short-term profitability but improve its working-capital management and cash flow, according to the company.

The well-known Toledo firm was notified this month that a long-standing customer canceled a multi-million order for promotional holiday glassware scheduled for fall. The order is arranged annually, and the customer decided to do another type of promotion this year, said Kenneth Boerger, Libbey's treasurer.