Date: 29 October 2010
Highlights:
* Earnings: Reported net earnings were $0.84 per share (diluted) in the third quarter of 2010, compared to $0.74 per share in the prior year. Adjusted net earnings (non-GAAP) of $0.90 per share were down from $0.95 per share in the third quarter of 2009. Unfavorable currency translation affected earnings by $0.04 per share.
* Volume: Global shipments were down 2.4 percent from the prior year third quarter, but the impact on earnings was mostly offset by a favorable regional sales mix. Excluding volume loss tied to contract renegotiations effective in 2010, total shipments were up slightly compared to the third quarter of last year.
* End Market Trends: Year-to-date glass shipments for beer in emerging markets, and wine and spirits on a global basis were up between 5 and 13 percent. Beer in mature markets remained soft.
* Costs: Manufacturing and delivery costs increased from the prior year third quarter primarily due to inflation.
* Strategic Events: O-I purchased CIV (Companhia Industrial de Vidros), the largest glass container producer in northern Brazil, and increased production with two new furnaces in South America to serve fast-growing markets.
* Capital Structure: O-I’s strong financial flexibility was further improved by a €500 million bond offering in the third quarter to fund the Company’s strategic growth.
* Venezuela Plants: On October 26, 2010, the Venezuelan government decreed the expropriation of O-I’s operations in Venezuela. This business represents less than 5 percent of the Company’s global segment operating profit. O-I is pursuing a resolution of this matter that benefits its employees, customers, and shareholders.
Third-quarter net sales were $1.74 billion in 2010, down from $1.87 billion in the prior year, primarily due to unfavorable foreign currency translation effects.
Net earnings attributable to the Company in the third quarter of 2010 were $138.7 million, or $0.84 per share (diluted), compared to $126.7 million, or $0.74 per share (diluted), in the prior year. Excluding items management considers not representative of ongoing operations, adjusted net earnings were $148.1 million, or $0.90 per share (diluted), compared to third quarter 2009 adjusted net earnings of $162.7 million, or $0.95 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 on the Company’s Web site, www.o-i.com/investorrelations.
Commenting on the Company’s third quarter, Chairman and Chief Executive Officer Al Stroucken said, “Our financial results reflected the varying pace of economic recovery in the regions we serve. In the emerging markets, glass demand improved in all end-use categories. Globally, demand was up across the wine, food and spirits categories, while beer demand remained sluggish in the more mature markets. We continued to execute on our long-term growth strategy. During the quarter, we acquired CIV in northern Brazil and opened new furnaces in Peru and Argentina. These initiatives build on acquisitions earlier this year in Argentina, China, Malaysia and Vietnam, as we expand our business in attractive and growing markets.”
Read the full press release.
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