Stung by inflationary pressure, Owens-Illinois Inc. yesterday reported third quarter profits that failed to meet already-lowered expectations of Wall Street analysts.
Toledo's second largest company reported earnings from ongoing operations of 34 cents a share or 11 cents less than the 45 cents expected by analysts surveyed by Thomson Financial.
Additionally, the firm's executives warned that full-year net profit would likely be lower than the $1.43 per share made in 2004 because of increases in costs of raw materials, energy, and transportation.
Officials characterized inflationary cost pressures as "unprecedented."
On a positive note, the company said shipments of bottles to brewers, drug stores, and others were higher than a year earlier and that it was benefiting from improvements in selling prices, increased productivity, and cost reductions.
The company said it made $120 million on revenues of $1.8 billion in the three months ended Sept. 30.
That was up from $76 million on revenues of $1.7 billion a year earlier.
On a net basis, per-share earnings in the third quarter of 2005 were 75 cents compared to 47 cents a year earlier.
"Cash generation for debt reduction, our top priority, was excellent this year," Steve McCracken, chief executive officer, said in a written statement.
"We remain on track in our turnaround and transformation..."
Executives warned Wall Street Sept. 15 that 2005 profits would not meet earlier predictions due to rising expenses.
They had earlier estimated the company would earn $1.76 to $2 a share in 2005.
While officials didn't offer new guidance when they issued that warning, analysts reduced their estimates for the third quarter to 45 cents a share from 56 cents a share, according to Thompson Financial.
Analysts dropped full-year expectations to $1.59 a share from $1.80, Thompson said.
O-I stock has lost a third of its value over the past two months, shedding $9 since August 23 when it closed at 27.19.
The company announced earnings after markets closed yesterday. Still, O-I's stock slipped another 38 cents, or 2 percent, to $18.47 a share in heavy trading on the New York Stock Exchange. About 2.2 million shares were exchanged, compared to 1.5 million shares on a normal day.