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Why O-I Glass Stock Was Falling Today
Key Points
O-I missed estimates on the top and bottom lines.
Operational and competitive challenges in Europe impacted results.
The company cut its EBITDA guidance for this year and 2027.
Shares of O-I Glass (NYSE: OI), a leading maker of glass bottles and containers, were moving lower today after the company came up short in its second-quarter earnings report.
As of 1:41 p.m. ET, the stock was down 17.4% on the news.
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What happened with O-I Glass
Overall revenue was down 2% to $1.67 billion, just shy of expectations at $1.69 billion.
Bottom-line results were even more disappointing as adjusted earnings per share fell from $0.53 to $0.09, well below the consensus at $0.26 per share. Management cited operational challenges in Europe, including competitive pricing pressure, elevated energy costs, and a temporary disruption in operations due to restructuring. Operating profit in Europe was just $6 million, while operating profit in the Americas increased 22% to $165 million, with a 17.4% operating margin.
Management credited its Fit to Win cost-savings program for delivering strong results in the Americas. The company also took a $873 million goodwill impairment charge in Europe due to a decline in its stock price, weaker results, and a lower outlook in Europe.
What's next for O-I Glass
Looking ahead to the rest of the year, O-I cut its guidance. The company now sees adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1 billion-$1.1 billion for the year, down from an earlier target of $1.125 billion-$1.225 billion, due to the challenges in Europe.
It also lowered its adjusted EBITDA target for 2027 as it now sees $1.2 billion-$1.3 billion in adjusted EBITDA, compared to an earlier forecast of $1.45 billion.
Given that, it's not surprising to see the stock down double digits today.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.