Libbey Inc. warned investors on Wednesday that revenue is likely to be weaker than expected when the company reports its third-quarter results later this month.
The Toledo-based glassware firm expects to post revenue of about $204 million for the quarter, which ended Sept. 30. That would be about $5 million less than Libbey posted in last year’s third quarter.
The news sent shares of its stock down more than 10 percent in heavy trading on Wednesday. Libbey shares closed the day down $2.43 cents to $21.03.
Libbey said weak demand and softness in consumer spending weighed on retail sales in the United States, China, and Canada. Food service sales also were slower than expected in those markets, though to a lesser degree, Libbey said.
Also affecting third-quarter revenue were costs associated with the firm’s realignment of production capacity in North America. Officials had cautioned that unused capacity would drag on third-quarter results.
Libbey was also sidelined by an early September fire that damaged one of the furnaces at its Toledo plant. The company said it expected to take a $2 million hit from that because of underutilized production capacity in the quarter.
The company said it expects to incur between $4 million and $6 million in costs related to the fire in this quarter, though insurance polices may cover some losses.
Stephanie Streeter, Libbey’s chief executive officer, said that while the third quarter was disappointing, officials are pleased with the continuing progress on the company’s strategic plan and its efforts to control costs despite weak U.S. and Chinese markets.
“We are well-positioned in these markets for long-term growth as the economic environment improves, and we continue to see strong results in our other high-growth markets,” she said in a statement. “We will continue to focus on improving our cost structure, increasing productivity, strengthening our balance sheet, and positioning the company for profitable growth in the future.”
The company cautioned that weak retail sales are likely to continue through the year, though growth in Mexico and Latin America partially will offset the demand issues in the United States, Canada, and China. Overall, 2013 sales are expected to be slightly less than 2012 sales.
The company reports third-quarter earnings on Oct. 29.
Contact Tyrel Linkhorn at firstname.lastname@example.org or 419-724-6134.
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