O-I Glass(US:OI) ZACKSยท2024-08-29 16:37Core Viewpoint - O-I Glass reported a significant decline in earnings and revenues for Q2 2024, leading to a lowered outlook for the remainder of the year, reflecting weak demand and operational challenges [2][8]. Financial Performance - Adjusted EPS for Q2 2024 was 44 cents, beating the Zacks Consensus Estimate of 42 cents, but down 50% year-over-year [2] - Revenues for the quarter were $1.73 billion, an 8.5% decrease from the previous year, missing the Zacks Consensus Estimate of $1.75 billion [3] - The cost of sales decreased by 3.3% year-over-year to $1.43 billion, while gross profit fell 27.2% to $303 million, resulting in a gross margin of 17.5% compared to 22% in the prior year [4] Segment Performance - In the Americas segment, net sales dropped 9.7% year-over-year to $899 million, with operating profit down 15.9% to $106 million [5] - The Europe segment reported net sales of $802 million, a 7.1% decline year-over-year, with operating profit falling 36.5% to $127 million [6] Cash Flow and Debt - Cash and cash equivalents decreased to $671 million as of June 30, 2024, down from $913 million at the end of 2023 [7] - Operating cash flow for the quarter was $250 million, compared to $291 million in the prior year, while long-term debt was reduced to $4.65 billion [7] Outlook - O-I Glass has lowered its 2024 adjusted earnings projection to $1.00-$1.25 per share from $1.50-$2.00, citing weak demand and planned production cuts [8] - Sales volume is expected to remain flat or decline in the low-single digits, with free cash flow projections reduced to $50-$100 million [8] Estimate Trends - Consensus estimates have trended downward, with a significant shift of -93.08% noted in the past month [9] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [11] VGM Scores - O-I Glass has a Growth Score of B, a Momentum Score of F, and a Value Score of A, placing it in the top 20% for value investment strategy [10]