Owens-Illinois, Inc., of the United States reported improved results for the second quarter and first six months of 1997. For the second quarter, earnings before extraordinary items were US$ 86.9 mill…
Owens-Illinois, Inc., of the United States reported improved results for the second quarter and first six months of 1997. For the second quarter, earnings before extraordinary items were US$ 86.9 million, up 30% from US$ 66.6 million in the second quarter of 1996. Earnings per share before extraordinary items were US$ 0.66 per share in the second quarter of 1997, compared with US$ 0.55 per share in the second quarter of 1996. Net sales rose 27% to US$ 1.225 billion, up from US$ 963.7 million in the corresponding 1996 period. The Chairman and CEO of Owens-Illinois, Joseph H. Lemieux, said, “Recent acquisitions, combined with continued growth in demand for our products, contributed to a solid performance in the second quarter as we continue to build on our record of strong earnings growth. As a result of our successful refinancing plan, we now have additional financial flexibility to pursue our strategy for expansion in growing markets.” In the past five years, Owens-Illinois has achieved remarkable increases in earnings from continuing operations, excluding the effects of unusual items. The international operations recorded strong second quarter increases in sales and operating profit, due primarily to the acquisition in February of Avir, a leading Italian glass container company, with additional operations in the Czech Republic and Spain. The second quarter results also reflect increased shipments of glass containers in emerging markets, as well as improved productivity resulting from investments by foreign affiliates in Owens-Illinois technology and equipment. Higher sales by the domestic glass container operations were the result of increased shipments from existing facilities, principally to US brewers, as well as the acquisition in February of certain assets of Anchor Glass Container Corporation (US). Integration costs and related acquisition effects unfavourably impacted operating profit in the second quarter of 1997. For the first six months of 1997, earnings before extraordinary items were US$ 141.5 million or US$ 1.11 per share, compared with US$ 106.2 million, or US$ 0.88 per share for the first half of 1996. Net sales were US$ 2.281 billion for the first half of 1997, up from US$ 1.87 billion in 1996. Owens-Illinois is refinancing about US$ 1.9 billion of public indebtedness. The plan is being funded by about US$ 1 billion from the issuance of 16.9 million shares of common stock and offerings of senior notes, combined with added borrowings under an amended bank credit facility. “When completed, the refinancing plan is expected to be accretive to earnings per share. However, because the retirement of the higher-coupon outstanding debt began late in the second quarter, with additional issues scheduled to be redeemed later in the year, the effect of the plan on second quarter earnings per share was slightly dilutive,” the company said. In fact, the company recorded extraordinary after-tax charges of US$ 84.5 million in the second quarter 1997 for the early retirement of debt as part of the refinancing plan. Net earnings after the charges were US$ 2.4 million, or US$ 0.02 per share for the first quarter, and for the first half net profits were US$ 57 million.