Currency Fluctuations Negatively Impact O-I in the 2018 Third Quarter
Net sales for O-I in the third quarter of 2018 were $1.7 billion, 3% lower than the 2017 third quarter.
Owens-Illinois, Inc. (O-I) recently reported financial results for the third quarter ended September 30, 2018. Net sales in the third quarter of 2018 were $1.7 billion, 3% lower than the 2017 third quarter. The impact of currency adversely impacted net sales by 3% and, while manifested in every region, was most pronounced in Americas (down 4%) and Asia-Pacific (down 7%). Prices were up by approximately 2%, reflecting a favorable sales mix and ongoing cost inflation.
Global sales shipments were down 2% compared with the 2017 third quarter. Sales in Europe were lower than the prior year, despite higher shipments to non-alcoholic beverage customers. Shipments to wine customers declined due to the weak grape harvest in the prior year and to food customers due to mix management. Within the Americas, lower shipments in the U.S., as a result of shifting production to the joint venture with Constellation Brands, Inc. (CBI) and to ongoing trends in beer, were largely offset by gains reported in nearly every other country. Shipments in Asia-Pacific were lower year-on-year, largely due to Australia, which had strong sales in the comparable period; shipments in the rest of the region were up nearly 10% compared with the third quarter of 2017.
O-I’s joint venture with CBI reportedly continues to perform well, again returning higher sales compared with the prior year’s third quarter, driven in part by a fourth furnace that ramped up earlier this year. The fifth furnace is expected to be operational by the end of 2019.
“Our third quarter results were in line with management’s guidance, despite headwinds from foreign currency and transitory volume trends,” said Andres Lopez, CEO. “Our European operations profited from ongoing favorable sales mix, pricing dynamics and continued cost reduction efforts. In the Americas, O-I demand for glass was modestly positive when incorporating the strong year-on-year performance of our joint venture with CBI. In Asia Pacific, we successfully completed our asset advancement projects for the year and will return the region to more normalized margins in the fourth quarter. Building on a solid foundation at O-I, we expect renewed growth in sales, margins, earnings and cash flow in 2019 and beyond.”
For more information, visit www.o-i.com.