Owens-Illinois Inc., reported a sharp rise in income for the 3Q 2007 on 25 October 2007. The increase, helped by improvements in its glass business, beat analyst expectations.
Quarterly net income af…
Owens-Illinois Inc., reported a sharp rise in income for the 3Q 2007 on 25 October 2007. The increase, helped by improvements in its glass business, beat analyst expectations. Quarterly net income after convertible preferred dividends rose to USD 1.15 billion, or USD 6.86 per share, from USD 3 million, or USD 0.02 per share, in the year-ago quarter. Results include a USD 1.07 billion gain from the sale of a former plastics packaging business and a tax charge of USD 55 million, or USD 0.33 per share, for restructuring and impairment related to glass container investments and operations in the Caribbean and Europe. Excluding one-time items, net income rose to USD 0.78 per share from USD 0.26 per share a year ago. The increase excluding one-time items is due to improvements in price and product sales mix related to adjustments to contractual sales prices to account for prior years“ cost inflation. Results were also helped by a lower worldwide effective tax rate and improvements in operational efficiencies at glass factories. Revenue rose 13% to USD 1.97 billion from USD 1.74 billion in 2006. Analysts polled by Thomson Financial expected a profit of USD 0.64 per share on revenue of USD 1.89 billion. JPMorgan analyst Claudia Shank said the strong results came mostly from better-than-expected results in the company“s core glass business, along with USD 0.07 per share in improvement from lower-than-expected interest expense. “We think the stock will react very favorably to the strong 3Q beat”, she wrote in a note to investors on 25 October 2007. She affirmed the company“s “Overweight” rating. “We believe that 3Q is a firm sign that the 1H of 2007 turnaround was not a fluke”, Wachovia Capital Markets analyst Ghansham Panjabi wrote in a note to investors on 25 October 2007. “We believe Owens-Illinois is materially better positioned to handle inflationary pressures going forward”. Mr. Punjabi reiterated the stock“s “Outperform” rating.