O-I Glass cuts FY24 adjusted EPS view to $1.50-$2.00 from $2.25-$2.65

Consensus $2.38. Sees FY24 free cash flow $100M-$150M. The company said, “The company now expects sales volume (in tons) will be flat-to-up low single digits for full year 2024 which compares to the company’s original outlook of low-to-mid single digit growth. A lower growth rate reflects a slower than anticipated rate of consumer consumption recovery following the current market downturn as well as a longer duration of inventory destocking in key end-use categories including wine and spirits. Likewise, the company will incur additional temporary production curtailment costs to balance supply with lower demand, which will be partially mitigated by at least $175 million of margin expansion initiative benefits compared to the original target of more than $150 million. The updated outlook also reflects unfavorable foreign currency translation, higher interest expense and a higher tax rate compared to original guidance. Management now anticipates full year adjusted earnings will range between $1.50 and $2.00 per share (diluted) and free cash flow should be between $100 and $150 million. While the pace of consumer recovery is slower than originally anticipated, the company remains confident in the long-term positive trajectory of glass packaging demand, continuing to benefit from mega trends such as premiumization, sustainability, and health and wellness, as well as strong favorable earnings potential as markets recover over time. Guidance primarily reflects the company’s current view on sales and production volume, mix and working capital trends. O-I’s adjusted earnings outlook assumes foreign currency rates as of April 30, 2024, and a full-year adjusted effective tax rate of approximately 30 to 33 percent compared to the prior outlook of 25 to 27 percent. The adjusted earnings and free cash flow guidance ranges may not fully reflect uncertainty in macroeconomic conditions, currency rates, energy and raw materials costs, supply chain disruptions and labor challenges, among other factors.”