Owens-Illinois Provides 1Q Preview - Analyst Blog

By Zacks Equity Research,

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Owens-Illinois, Inc.  ( OI ) provided a sneak preview of the first-quarter 2012 results ahead of its conference call, scheduled on April 26, 2012. The company expects earnings per share to be above 67 cents, a 35% climb over and above the prior-year quarter's earnings of 50 cents per share. The upsurge is attributed to higher levels of production, pricing actions, lower costs and cost cuts. The forecast is well ahead of the Zacks Consensus Estimate of 50 cents for the quarter.

The company indicated higher-than-expected production in the first quarter. Finished goods inventory levels had been upped during the quarter to meet the upcoming seasonal sales demand, particularly in North America and Europe, and to avoid the supply chain inefficiencies experienced last year.

Besides, pricing actions to offset unrecovered prior-year and current inflation have also helped results. Lower-than-expected costs in the first quarter due to successful SAP deployment in North America along with benefits from previous cost reduction activities in the second half of 2011, also perked up results.

The company, during its fourth quarter earnings call, had expressed its skepticism regarding volume performance in 2012 given the stalemate in Europe. Owens-Illinois stated that with no improvement in the scenario, the visibility still remains cloudy. Owens-Illinois asserted that it will actively manage its production levels for significant changes in sales demand patterns, and such actions could considerably influence future financial results.

The company competes with  Silgan Holdings Inc.  ( SLGN ). Silgan is expected to report its first quarter earnings on April 26, 2012. The company expects first quarter earnings to be around 41 cents.

Headquartered in Perrysburg, Ohio, Owens-Illinois, through its subsidiaries, manufactures and sells glass containers primarily in Europe, North America, South America, and the Asia-Pacific. Owens-Illinois presently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

OWENS-ILLINOIS ( OI ): Free Stock Analysis Report
SILGAN HOLDINGS ( SLGN ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: OI , SLGN

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