On a day that strong corporate earnings news sent U.S. stocks up, two metro Toledo glass makers did their part with quarterly profit reports that beat Wall Street expectations.
Shares of bottle-maker Owens-Illinois Inc. of Perrysburg climbed $2.60, or 9 percent, to $32.59 each. The company earlier announced adjusted profit of 94 cents a share, or 4 cents more than financial analysts had anticipated.
Tableware manufacturer Libbey Inc. said it made 18 cents a share, which compared to expectations of a loss of 55 cents. And executives, in a morning conference call with analysts, indicated a deal could be near to ease the firm's $546 million debt load. They expect to make an announcement by Sept. 30 concerning the debt, said analyst Arnie Ursaner, of CJS Securities Inc., White Plains, N.Y.
"We're doing what we said we had to do in the face of worldwide sluggish markets and the worst recession in over 50 years," Chief Executive John Meier said during the call.
"It will be a journey for Libbey. We believe we have embarked and the corner is being turned."
A flurry of strong earnings reports helped send the Dow Jones industrial average of blue-chip stocks up 84 points, or 1 percent, to 9,154.
Still, both Libbey and O-I continue to be battered by the recession, which has dampened sales at both firms globally.
O-I, a major supplier to brewers, wineries, and distilleries, reported it made $149 million in the second quarter, down from $231 million at the same time in 2008. On a per-share basis, it had a profit of 88 cents compared to $1.33 last year. Wall Street analysts tend to focus on adjusted earnings, which exclude the impact of one-time events such as costs associated with the shutdown of a plant or sale of a business.
Quarterly sales declined in the quarter to $1.8 billion from $2.2 billion a year ago as bottle shipments plummeted 12 percent. Chief Executive Al Stroucken said in a conference call that the drop in shipments "is a clear sign the global recession continues."
Ghansham Panjabi, an analyst with Robert W. Baird & Co. in Roseland, N.J., said O-I is well-positioned to return to previous levels of profitability when the economy improves. Unlike past recessions, executives didn't slash prices to retain customers but used events as on opportunity to permanently reduce costs.
At Libbey, profits in the second quarter rose to $2.7 million, or 18 cents a share, from a loss of $2.1 million, or 14 cents a share, for the period a year ago. Quarterly sales declined 13 percent to $196 million from $225 million last year.
Sales to restaurants and other institutional buyers continued to decline but at a slower pace. And shipments to retail stores rose 7 percent.
Mr. Ursaner, the analyst with CJS Securities, said this is a sign that retailers are shifting back to domestic suppliers from imports as a way of reducing delivery times. "Retailers want inventory closer to home," he said. Among Libbey's factories is a plant on Ash Street in North Toledo.
Libbey shares rose 16 percent yesterday to $1.80 in trading on the over-the-counter market.
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