O-I Glass reported strong second quarter results for 2023 as higher average selling prices boosted sales by approximately $100 million.
O-I’s financial results for its second quarter ended on June 30, 2023.
Andres Lopez, O-I Glass CEO, said: “We are pleased to report a strong second quarter performance, which exceeded guidance, as O-I continued to execute well amid more challenging macro conditions.
“Business performance improved significantly from the prior year reflecting favourable net price realisation, solid operating results and benefits from our ongoing margin expansion initiatives which more than offset the impact of softer demand. We continue to expect 2023 adjusted earnings will significantly exceed the prior year given strong execution and operating performance.”
Net sales were $1.9 billion in the second quarter of 2023, up compared to $1.8 billion in the prior year period primarily due to higher average selling prices as well as favourable foreign currency translation, partially offset by lower shipment levels.
Sales volume (in tons) was down 9% from the prior year, which was primarily attributed to softer consumer consumption activity and inventory destocking across the value chain.
Earnings before income taxes were $154 million in the second quarter of 2023 compared to $328 million in the prior year, down 53%.
Results reflected higher segment operating profit which was more than offset by items management considers not representative of ongoing operations, including refinancing charges this year and a one-time gain on a sale leaseback transaction in the prior year period, as well as higher interest expense.
Segment operating profit was $326 million in the second quarter of 2023, up 27% compared to $257 million in the prior year period.
Retained corporate and other costs were $54 million compared to $53 million in the second quarter of 2022.
O-I has tightened its full-year financial guidance range and now expects adjusted earnings will approximate $3.10 to $3.25 per share. Adjusted free cash flow should be approximately $475 million and free cash flow should approximate $175 million.
Third quarter 2023 adjusted earnings should approximate $0.68 to $0.73 per share compared to $0.63 in the prior year quarter.
Higher earnings are expected to reflect strong net price and continued solid operating and cost performance while shipment levels will likely be down compared to the prior year primarily reflecting softer consumer demand in several markets and categories.
Results are also expected to reflect higher costs due to temporary production curtailment to align supply with demand as well as higher interest expense.