Owens Illinois Earnings: Profit RISES, Revenue Dips

S&P 500 (NYSE:SPY) component Owens Illinois Inc. (NYSE:OI) reported net income above Wall Street’s expectations for the second quarter. Owens-Illinois manufactures glass containers primarily for the food and beverage industries in Europe, North America, South America, and Asia Pacific.

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Owens Illinois Inc. Earnings Cheat Sheet

Results: Net income for Owens Illinois Inc. rose to $133 million (80 cents per share) vs. $73 million (43 cents per share) in the same quarter a year earlier. This marks a rise of 82.2% from the year-earlier quarter.

Revenue: Fell 9.9% to $1.77 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Owens Illinois Inc. beat the mean analyst estimate of 76 cents per share. It fell short of the average revenue estimate of $1.92 billion.

Quoting Management: Commenting on the Company’s second quarter, Chairman and Chief Executive Officer Al Stroucken said, “Earnings improved significantly from the prior year second quarter due to a strong operating performance and positive results from our pricing strategy. Our North American region led the profit improvement this quarter as it successfully eliminated the manufacturing and supply chain inefficiencies experienced in 2011 and re-established itself as a high performing region.”

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 14.5%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 7 cents in the first quarter, by 2 cents in the fourth quarter of the last fiscal year, and by 12 cents in the third quarter of the last fiscal year.

Cost of sales dropped to $1.39 billion, down 13.3% from the year-earlier quarter. Last quarter, cost of sales was 78.7% of revenue versus 81.9% a year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 84 cents a share to 79 cents over the last sixty days. For the fiscal year, the average estimate has moved down from $2.89 a share to $2.76 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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