Owens-Illinois, Inc. reported on 30 July 2008 net sales of USD 2.211 billion for the 2Q 2008, compared to USD 1.997 billion a year ago, up USD 214 million, or 11%. Price and product sales mix added US…
Owens-Illinois, Inc. reported on 30 July 2008 net sales of USD 2.211 billion for the 2Q 2008, compared to USD 1.997 billion a year ago, up USD 214 million, or 11%. Price and product sales mix added USD 154 million to the quarterly sales growth, partially offset by a USD 124 million decrease from fewer tons sold. Favorable currency translation contributed USD 201 million to the sales increase. On 31 July 2007, the company sold its Plastics Packaging business. In accordance with generally accepted accounting principles, prior year amounts related to that business have been reclassified and reported as discontinued operations. The company“s earnings from continuing operations in the 2Q 2008 increased to USD 227.5 million, compared with USD 153.8 million for the 2Q 2007. Net earnings for the quarter included charges of USD 4.2 million for restructuring and asset impairment. Earnings for the 2Q 2007 included a USD 13.5 million gain from the recognition of foreign tax credits. Management considers both of these items unrepresentative of ongoing operations. Exclusive of these items, 2Q 2008 earnings were USD 231.7 million, compared with USD 140.3 million in the same quarter 2007. The increase in earnings was driven primarily by an improvement in price and product sales mix in all regions, favorable foreign currency translation and lower net interest expense. The improvement was partially offset by higher manufacturing input costs for energy and raw materials, higher transportation costs, reduced sales volume and reduced production volume. The company earned USD 1.33 per share (diluted) from continuing operations in the 2Q of 2008, compared with USD 0.92 (diluted) per share for the 2Q of 2007. Exclusive of certain items management considers not representative of ongoing operations, earnings per share increased to USD 1.35 (diluted) in the 2Q of 2008 from USD 0.84 (diluted) in the same quarter 2007. “Our strong results this quarter and for the 1H of 2008 are further affirmation of the validity of our strategies and the success with which our employees around the world have implemented them”, said Al Stroucken, chairman and chief executive officer. “Despite the inflationary environment, we are confident that we will continue to improve the efficiency and profitability of our business as we look for opportunities to expand our successful business model in growing markets”. “Rising input costs and a slower economy will make the 2H of 2008 a tougher operating environment for all packaging manufacturers, including O-I”, said Stroucken. “In spite of this, we fully expect that 2008 will be a record year for the company, as we will continue to be aggressive with our pricing, footprint realignment, Lean Six Sigma and productivity improvement initiatives. In this environment our operational decisions will be largely guided by our cash flow objectives for the year and beyond”.