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Owens-Illinois (OI) Q1 Earnings: Will the Stock Disappoint?

Manufacturer of glass containers, Owens-Illinois, Inc.OI is scheduled to report first-quarter 2017 results on Apr 24, after the closing bell. In the last reported quarter, the company's adjusted revenues surged 25% while revenues inched up 1% from the prior-year quarter. While earnings per share beat the Zacks Consensus Estimate, revenues came in line. Let's see how things are shaping up prior to this announcement.

Earnings Whispers

Our proven model does not conclusively show that Owens-Illinois is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here, as you will see below.

Zacks ESP: Owens-Illinois' Earnings ESP is -5.66% as the Most Accurate estimate of 50 cents is pegged lower than the Zacks Consensus Estimate of 53 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Though Owens-Illinois' Zacks Rank #3 increases the predictive power of the ESP, its negative ESP makes a beat unlikely this quarter. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Surprise History

n the last reported quarter, the company posted a positive earnings surprise of 6.38%. Owens-Illinois has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in all the trailing four quarters, with an average earnings beat of 8.56%.

Owens-Illinois, Inc. Price and EPS Surprise

Owens-Illinois, Inc. Price and EPS Surprise | Owens-Illinois, Inc. Quote

Price Performance

Owens-Illinois has underperformed the Zacks categorized Glass Products industry in the last one year. The stock has gained 10.1%, lower than the industry's rise of 12%.

Factors at Play

Owen-Illinois' acquisition of Vitro's food and beverage business will continue to boost both its top-line and bottom-line results. However, results will be affected by uncertainty in macroeconomic conditions and currency rates, among other factors. In Europe, sales volume is likely to be flat. However, continued competitive pricing pressure will be negated by manufacturing and supply chain initiatives. The North America region stands to benefit from higher equity earnings. In Latin America, operating profit will be modestly down in the first quarter on flattish sales volumes.

Asia Pacific is expected to bounce back starting in the first quarter. After taking into account incorporate costs and interest and taxes, the company projects adjusted EPS in the range 50-55 cents for the quarter. Overall, results are anticipated to improve in the quarter given that the midpoint of the guidance reflects a 9% year-over-year growth.

Stocks to Consider

Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Deere & Company DE has an Earnings ESP of +5.03% and carries a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

AGCO Corporation AGCO has an Earnings ESP of +5.88% and carries a Zacks Rank #2.

Avery Dennison Corporation AVY has an Earnings ESP of +2.88% and a Zacks Rank #2.

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Owens-Illinois, Inc. (OI): Free Stock Analysis Report

Deere & Company (DE): Free Stock Analysis Report

AGCO Corporation (AGCO): Free Stock Analysis Report

Avery Dennison Corporation (AVY): 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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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