Owens-Illinois, Inc. (OI) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $71 million, or $ 0.44 a share in the quarter, against a net profit of $7 million, or $0.03 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $81 million, or $0.50 a share compared with $64 million or $0.40 a share, a year ago.
Revenue during the quarter went up marginally by 0.98 percent to $1,642 million from $1,626 million in the previous year period. Gross margin for the quarter contracted 486 basis points over the previous year period to 13.09 percent. Total expenses were 95.68 percent of quarterly revenues, up from 90.84 percent for the same period last year. That has resulted in a contraction of 484 basis points in operating margin to 4.32 percent.
Operating income for the quarter was $71 million, compared with $149 million in the previous year period.
CEO Andres Lopez stated, "Our multi-year transformation is off to a strong start we achieved the key financial targets that we outlined at investor day in early 2016. Margins(2) expanded more than 100 basis points, due to the benefits of our strategic initiatives and the acquired business. We are executing on our strategy, overcoming visible external challenges from Brazil macros, the Brexit vote and the strengthening U.S. dollar."
For fiscal year 2017, Owens-Illinois, Inc. expects net income to be in the range of $391 million to $408 million and forecasts adjusted net income to be in the range of $391 million to $408 million. The company forecasts diluted earnings per share to be in the range of $2.40 to $2.50 and forecasts diluted earnings per share to be in the range of $2.40 to $2.50 on adjusted basis.
Operating cash flow improves
Owens-Illinois, Inc. has generated cash of $751 million from operating activities during the year, up 23.52 percent or $143 million, when compared with the last year.
The company has spent $417 million cash to meet investing activities during the year as against cash outgo of $2,748 million in the last year. It has incurred net capital expenditure of $369 million on net basis during the year, down 7.98 percent or $32 million from year ago.
The company has spent $228 million cash to carry out financing activities during the year as against cash inflow of $2,057 million in the last year period.
Cash and cash equivalents stood at $492 million as on Dec. 31, 2016, up 23.31 percent or $93 million from $399 million on Dec. 31, 2015.
Working capital declines
Owens-Illinois, Inc. has witnessed a decline in the working capital over the last year. It stood at $194 million as at Dec. 31, 2016, down 8.49 percent or $18 million from $212 million on Dec. 31, 2015. Current ratio was at 1.09 as on Dec. 31, 2016, down from 1.10 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 11 days for the quarter from 9 days for the last year period. Days sales outstanding were almost stable at 16 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 32 days for the quarter compared with 35 days for the previous year period. At the same time, days payable outstanding went down to 37 days for the quarter from 42 for the same period last year.
Debt comes down marginally
Owens-Illinois, Inc. has recorded a decline in total debt over the last one year. It stood at $5,328 million as on Dec. 31, 2016, down 4.40 percent or $245 million from $5,573 million on Dec. 31, 2015. Total debt was 58.33 percent of total assets as on Dec. 31, 2016, compared with 59.16 percent on Dec. 31, 2015. Debt to equity ratio was at 14.68 as on Dec. 31, 2016, up from 9.71 as on Dec. 31, 2015.
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