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Owens-Illinois (OI) Q2 Earnings: Stock to Pull a Surprise?

Owens-Illinois, Inc.OI is slated to release first-quarter 2016 results after the market closes on May 2. In the last reported quarter, Owens-Illinois had reported adjusted earnings of 40 cents per share, reflecting a 25% year-over-year surge on a constant currency basis. Let's see how things are shaping up for this announcement.

Earnings Whispers

Our proven model does not conclusively show that Owens-Illinois will 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. But that is not the case here, as you will see below.

Zacks ESP : Owens-Illinois has an Earnings ESP of +0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at 40 cents.

Zacks Rank : Though Owens-Illinois' Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

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

Last quarter, this manufacturer of glass containers delivered in-line results with the Zacks Consensus Estimate. The company has delivered positive earnings surprises in three of the trailing four quarters with an average positive surprise of 2.96%.

Factors to Consider

The carryover effect of lower prices and the ramp-up of the planned manufacturing improvement in Europe will hurt first-quarter 2016 results. Performance in Latin America will be impacted by low volumes in Brazil. In the Asia-Pacific, the first quarter will see a higher production downtime due to extra furnace rebuilding activity, including one which was unplanned.

Further, based on higher corporate costs, interest and taxes, Owens-Illinois expects adjusted earnings in the quarter in the range of 37 cents to 42 cents. Compared to first-quarter 2015 earnings of 44 cents, this reflects a decline of 5-16%.

Stocks That Warrant a Look

Here are some companies you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Emerson Electric Co. EMR has an Earnings ESP of +3.17% and a Zacks Rank #2.

SPX FLOW, Inc. FLOW has an Earnings ESP of +50.00% and a Zacks Rank #2.

Regal Beloit Corp. RBC has an Earnings ESP of +0.92% and a Zacks Rank #2.

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OWENS-ILLINOIS (OI): Free Stock Analysis Report

SPX FLOW INC (FLOW): Free Stock Analysis Report

EMERSON ELEC CO (EMR): Free Stock Analysis Report

REGAL BELOIT (RBC): 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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