Owens-Illinois, Inc., announced 15 September 2005 that based on inflationary pressures and isolated operating issues, its earnings estimate probabilities for 2005 are falling below the lower end of th…
Owens-Illinois, Inc., announced 15 September 2005 that based on inflationary pressures and isolated operating issues, its earnings estimate probabilities for 2005 are falling below the lower end of the previously confirmed range (USD 1.76 – USD 2.00 per share) of First Call estimates in effect when the company conducted its 2Q 2005 conference call on 21 July 2005. Owens-Illinois continues to estimate earnings growth in 2005 compared with 2004 and net debt reduction during the year. For the last several quarters, rising energy, raw material and packing material (corrugated) costs have adversely affected earnings compared to prior periods. However, during the 3Q 2005, energy costs have increased at rates that significantly exceeded the company“s earlier expectations, resulting in higher manufacturing and distribution costs. Operationally, temporary capacity reduction initiatives to control inventory in Europe, manufacturing inefficiencies due to two furnace start-ups (following rebuilds) in North America, and higher SG&A costs related to European integration initiatives will also adversely affect earnings results. Owens-Illinois believes lower earnings expectations will likely cause the company“s net debt reduction probabilities for 2005 to fall below the lower end of the previously confirmed range of USD 150 million to USD 200 million discussed during the 2Q 2005 conference call. Despite this, the company remains committed to its long-term debt reduction strategy and continued earnings growth. Owens-Illinois will hold its next investor conference call to discuss 3Q 2005 results on 20 October 2005. Details about the conference call will be forthcoming.