) third-quarter 2012 adjusted earnings were 69 cents per share
compared to the year-ago adjusted earnings of 84 cents per share;
beating the Zacks Consensus Estimate of 66 cents.
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OWENS-ILLINOIS (OI): Free Stock Analysis
SILGAN HOLDINGS (SLGN): Free Stock Analysis
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On a reported basis, the company posted earnings of 55 cents per
share compared with the year-ago earnings of 72 cents.
Net sales decreased 6.2% to $1.747 billion in the quarter; net
sales, however, beat the Zacks Consensus Estimate of $1.746
billion. The year- over- year decline in net sales was
attributable to negative impacts of foreign currency as well as
lower volumes and lower demand in Europe, which offset the
positive effects of price and product mix and higher shipments in
Manufacturing, shipping and delivery expense decreased 4.7% year
over year to $1.405 billion in the quarter. Selling and
administrative expenses fell 5.1% to $131 million. Operating
profit also dipped 8.6% year over year to $245 million.
The decline in operating profit was attributable to higher
expenses related to manufacturing and delivery, cost inflation as
well as lower global shipments, offsetting the positive effects
of higher sales prices.
Cash and cash equivalents were $336 million as of September 30,
2012, versus $400 million as of December 31, 2011. Long-term debt
amounted to $3.537 billion as of September 30, 2012, compared
with $3.627 billion as of December 31, 2011. Cash provided by
operating activities was $225 million during the quarter compared
with $189 million in the year ago quarter.
The company is hopeful about generating free cash flow of $250
million in 2012. It expects profit in South America to grow year
over year, driven by strong demand and efficiencies from the
furnace in southern Brazil. However, the company apprehends that
lower demand in Europe will exert pressure on earnings in the
Owens-Illinois competes with companies like
Silgan Holdings Inc.
Crown Holdings Inc.
). In third-quarter 2012, Silgan's adjusted earnings improved
2.6% year over year to $1.17 per share, but missed the Zacks
Consensus Estimate by a penny.
Owens-Illinois retains a short-term Zacks #3 Rank (Hold). We have
a long-term Neutral recommendation on the stock.