O-I reports second quarter 2013 results

Earnings on par with prior year as benefits from footprint optimization offset soft demandHighlights Second quarter 2013 earnings from continuing operations attributable to the Company were $0.81 per share (diluted), compared with $0.81 per share in the same period of 2012. [1] Operating profits in Europe and Asia Pacific were higher, primarily driven by the benefits of ongoing footprint optimization. Global volumes were down approximately 1 percent. Wine gains in all regions were more than offset by softness in beer markets. The Company reaffirms its full year 2013 free cash flow outlook of at least $300 million.Commenting on the Company´s second quarter results, Chairman and Chief Executive Officer Al Stroucken said, "The Company performed in line with our expectations, notwithstanding weaker than expected demand. We are squarely focused on execution, especially asset optimization and wine share recovery in Europe, as well as labor productivity savings in North America. These actions are allowing us to achieve our targets despite headwinds."Operational highlightsNet sales in the second quarter of 2013 were $1.78 billion, similar to the prior year second quarter. Volume, in terms of tonnes shipped, decreased by 1 percent year-over-year. Unfavorable weather conditions in Europe and North America, as well as macroeconomic pressures in South America, led to lower beer volumes globally. This was partially offset by global gains in wine and double digit growth overall in Southeast Asia. The 2 percent increase in sales prices globally offset cost inflation.In the second quarter of 2013, segment operating profit was $267 million, in line with the prior year. The Company achieved improved profitability in Europe and Asia Pacific due to ongoing actions to optimize its footprint. South America´s profit was negatively impacted by a higher level of planned furnace rebuilds.Financial highlightsNet interest expense was $4 million lower than the prior year, primarily due to debt reduction and lower interest rates as the Company continues to strengthen its financial flexibility.The Company´s leverage ratio (net debt to EBITDA) was 2.9 times at the end of the second quarter of 2013, compared with 2.8 times in the previous year quarter. The Company expects to improve its leverage ratio to approximately 2.5 times by the end of the year.During the quarter, the Company continued to execute on its capital allocation priorities by purchasing approximately $10 million of outstanding stock.OutlookCommenting on the Company´s outlook, Stroucken said, "Our plans called for an environment marked by slow growth globally and macroeconomic volatility. We are seeing just that, with modest contraction in Europe, stability in North America, and slower expansion in South America. Currency headwinds, however, particularly in Brazil and Australia, are more pronounced than expected."We will continue to execute on our priorities that impact the bottom line in the near term, principally structural cost reductions, asset optimization, and managing production volatility. In the back half of the year, we expect higher volumes globally, partly driven by our efforts to recapture wine share in Europe. We remain steadfast in our commitment to generate higher earnings and cash flow, and to allocate capital in ways that enhance our financial flexibility and generate shareholder value."Management continues to expect free cash flow of at least $300 million in 2013. The Company has tightened the expected range of adjusted EPS in 2013 to $2.65 to $2.85 per share based on results to date, aforementioned currency and macroeconomic headwinds, and concerted management actions to reduce costs.Note 1The table below describes the items that management considers not representative of ongoing operations.To read more: Please click here 30.07.2013, Owens-Illinois, Inc.