Ongoing economic weakness in Europe and economic volatility in South America caused Owens-Illinois Inc. on Tuesday to post flat sales and flat earnings for 2013.
The Perrysburg-based maker of bottles and other glass containers reported annual earnings of $184 million, or $1.11 per share for 2013, the same as it had in 2012.
The company had revenues of nearly $7 billion in 2013, also the same as in 2012.
Al Stroucken, O-I’s chairman and chief executive officer, said the company will remain “focused on driving structural cost reductions, optimizing our asset base, and smoothing production.”
“The bottom-line benefits of these efforts were partially masked by ongoing economic weakness in Europe, and volatility in South America,” Mr. Stroucken said. “As committed, we are using most of our free cash flow to enhance our financial flexibility, while also repurchasing more than a million shares.”
For the fourth quarter, O-I had a loss of $147 million, or 90 cents a share. In the same period of 2012 it had a loss of $160 million, or 97 cents a share. Fourth-quarter sales were $1.76 billion, compared to $1.75 billion for the same period in 2012.
The company’s adjusted net earnings per share, which is watched closely by Wall Street analysts, was 51 cents a share. That was below the 53 cents a share consensus estimate that analysts were expecting.
O-I's stock rose 50 cents, or 1.6 percent, to $32.30 Tuesday before the earnings announcement. The stock was flat in after-hours trading.
To compensate for flat revenues, O-I successfully enacted a 2 percent price increase on its products worldwide but it was faced with a 1 percent loss on currency exchanges, primarily with the Brazilian Real and the Australian dollar.
The company said that its sales volumes were flat, with beer bottle sales volumes declining in all regions, although wine bottle volumes were up, led by a successful effort by O-I to recapture some of the wine business in Europe.
In other positive developments, O-I generated free cash flow of $339 million in 2013, an increase of 17 percent because of higher profits in its operating segments, improvements in its working capital, and lower pension contributions.
The company also repaid nearly $300 million of its debt in 2013. Also, for the sixth consecutive year its cash payments for asbestos-related liabilities decreased. Its 2013 payments totaled $158 million, down $7 million from 2012, and the number of new filings decreased from the prior year.
Mr. Stroucken said O-I is not expecting a dramatic improvement in global macroeconomic conditions in 2014. “We will stay the course by focusing on structural cost reductions and European asset optimization initiatives, all of which are on track to drive continued growth in free cash flow and earnings,” he said. “We are also investing for the long term. Our innovation center, which also serves as a pilot plant, will enable us to develop technologies to improve manufacturing efficiencies and increase speed to market. In all, we envision that our lean manufacturing footprint, market-focused organization, and strong balance sheet will deliver increasing shareholder value.”
Contact Jon Chavez at: email@example.com or 419-724-6128.