First-quarter highlights: Earnings:Reported net earnings were $0.50 per share (diluted) in the first quarter of 2010, up from $0.27 per share in the prior year.Adjusted net earnings (non-GAAP) also were $0.50 per share, compared with $0.55 per share in the first quarter of 2009.
Sales:Net sales increased more than 4 percent, primarily due to favorable currency translation.
Price:Improved price and product mix increased sales 1 percent on a year-over-year basis.
Volume:Total shipments were consistent with prior year as volumes improved in all regions butNorth America.
Costs:Input costs were flat. Savings fromO-I’s strategic footprint initiative offset higher unabsorbed fixed costs from temporary production curtailments, which helped reduce inventories by 19 percent from first quarter 2009.
As expected, non-operating costs, including corporate costs and interest expense, increased from the prior year.
Capital allocation:O-I acquired a controlling interest in a one-plant operation inArgentina andrepurchased
4.3 million shares of Company stock.
First-quarter net sales were $1.6 billion in 2010, up from $1.5 billion in the prior year primarily due to favorable foreign currency translation effects. Improved price and product mix was more than offset by an unfavorable change in regional sales mix.
Net earnings attributable to the Company in the first quarter of 2010 were $85.3 million, or $0.50 per share (diluted), up from $45.1 million, or $0.27 per share (diluted), in the prior year. As there were no items management considers not representative of ongoing operations in the first quarter of 2010, adjusted net earnings also were $85.3 million, or $0.50 per share (diluted). These results compared with first quarter 2009 adjusted net earnings of $92.8 million, or $0.55 per share (diluted). A description of items that management considers not representative of ongoing operations and a reconciliation of the GAAP to non-GAAP earnings and earnings per share can be found in Note 1 provided below and in the charts provided on the Company’s Web site, www.o-i.com/investorrelations.
Commenting on the Company’s first-quarter performance, Chairman and Chief Executive Officer Al Stroucken said, “The first quarter marked a turn in our business, ending nine consecutive quarters of unfavorable volume trends since the beginning of the global recession. We performed well in the quarter by raising our selling prices and improving the cost profile of our operations as shipments remained in line with the prior year. Consistent with our growth strategy, we acquired Cristalerias Rosario to enter the fast growing and profitable Argentinean market, which should further enhance our successful South American operations.”
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