Owens-Illinois Inc., lost nearly USD 900 million in the 4Q 2005 and more than USD 550 million for the full year, the glass container giant reported 1 February 2006.
The losses resulted mostly from la…
Owens-Illinois Inc., lost nearly USD 900 million in the 4Q 2005 and more than USD 550 million for the full year, the glass container giant reported 1 February 2006. The losses resulted mostly from large accounting charges and a slowdown in production. The Fortune 500 firm put most of the blame for its latest quarterly loss on a USD 494 million accounting charge taken for devaluation of Asian glass facilities, a USD 135 million increase in its reserves for asbestos-injury liability, and a USD 307 million charge for its deferred US income taxes. Chairman and chief executive officer Steven McCracken said in a prepared statement he was “delighted with our ability to generate significant cash flow and reduce debt.” The firm reduced its debt by USD 248 million in 2005 to about USD 4.8 billion, its lowest debt level since 1998. However, inflationary pressures and the need to idle some plants because of lower demand also hurt the financial picture, the CEO said. The firm reported that it lost USD 882 million, or USD 5.86 a share, in the 4Q, compared with a profit of USD 21.7 million, or USD 0.11 a share, for the period a year earlier. For the year, it lost USD 559 million, or USD 3.85 a share, compared with a profit of USD 235.5 million, or USD 1.43 a share, in 2004. For revenues, O-I said it had USD 7.2 billion in 2005, up 15% year-on-year, and USD 1.8 billion in the 4Q, up 3% from the period a year earlier. The company“s full year result for 2005 follows a turnaround in 2004 from a loss of nearly USD 1 billion in 2003. O-I warned in September 2005 that it was “falling below” its profit forecasts, but did not specify an amount. The firm“s latest asbestos charge brings the total to more than USD 2 billion in the last 15 years, although the company insists the problem is under control. It said cash payments to asbestos claimants of USD 171 million were the lowest since 1999 and that new filings were down 40% from 2004. O-I“s latest writedown of the book value of businesses bought in recent decades brings that total to well over USD 1 billion. It includes an accounting charge of USD 670 million two years ago for some of its plastic-bottle operations that were later sold for USD 1.2 billion.