Libbey Inc., lost USD 19.4 million in 2005 and cut its dividend by 75%, the glassware manufacturer reported 16 February 2006. It also expects to lose money during the current quarter.
“I“m painfully…
Libbey Inc., lost USD 19.4 million in 2005 and cut its dividend by 75%, the glassware manufacturer reported 16 February 2006. It also expects to lose money during the current quarter. “I“m painfully aware of the disappointing results in 2005,” John Meier, Libbey“s chairman and chief executive, told analysts and investors during a conference call. To help boost its finances, the company said it would cut the USD 0.10 quarterly dividend it has paid since 2003 to USD 0.025 a share. The next dividend will be paid 14 March 2006 to holders of record on 27 February 2006. Libbey missed analysts“ expectations for the 4Q by USD 0.39 a share; market reaction sent the share to a near record low, closing down USD 1.40 at USD 10.28 on the New York Stock Exchange. Douglas Lane, an analyst at AvondalePartners LLC of Nashville, advised investors to avoid Libbey stock, which he valued at USD 8 a share, until the business stabilizes in the next two years. The company“s annual loss, at USD 1.39 a share, was caused in part by USD 27 million in special charges, including the closure of a California plant and job losses. It also sold fewer glasses and candle containers, was hit by hurricane-related disruptions and natural gas price rises, and encountered other issues. Sales for 2005 were USD 568 million. By comparison, Libbey posted a profit for 2004 of USD 8.3 million, or USD 0.60 a share, on sales of USD 545 million. In the 4Q 2005, the firm lost USD 21 million, or USD 1.50 a share, versus a profit of USD 1.5 million, or USD 0.11 a share, a year earlier. The firm quietly increased its worker“s compensation reserves and reduced its inventories. Sales for the period were USD 158 million, up 3% and attributable to Libbey“s acquisition in 2005 of the former Crisal-Cristalaria Automatica SA in Portugal. In the current January to March 2006 quarter, it expects to lose USD 0.03 to USD 0.08 a share, in part because of USD 1.4 million in higher natural gas costs and other expenses. Buying out its Mexican joint venture partner could help Libbey stabilize its finances, said Mr. Lane, the analyst. Libbey and Mexico“s Vitro SA continue to talk about the value of the Mexican joint venture. Owning Vitrocrisa SA would allow Libbey to better compete for the once profitable industrial glass contracts for candles and other items it has lost in the last few years to foreign firms, Mr. Meier said. “Both sides are working very hard to achieve a positive outcome,” said Mr. Meier.