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O-I Glass, Inc. /DE/ (OI)·Q2 2025 Earnings Summary

Executive Summary

  • Adjusted EPS of $0.53 beat S&P Global consensus of $0.41; GAAP diluted EPS was $(0.03) due to $108M restructuring and impairment charges tied to halting MAGMA. Strong “Fit to Win” cost actions offset softer demand, with Americas strength and Europe weakness.*
  • Revenue of $1.706B was essentially in line vs consensus $1.708B; segment operating profit was $225M, down modestly YoY, with Americas up and Europe down.*
  • Guidance raised: FY25 adjusted EPS to $1.30–$1.55 (from $1.20–$1.50); free cash flow maintained at $150–$200M. Company expects volumes to be in line with prior year and tax rate ~33–36%.
  • Strategic pivot: O-I halted further MAGMA development and will reconfigure Bowling Green to a “Best at Both” premium-focused operation; announced additional Americas capacity actions and expects ~$45M closure charges in Q3.

What Went Well and What Went Wrong

What Went Well

  • Fit to Win momentum: $84M savings in Q2 (YTD $145M), on track for ≥$250M in 2025; inventory down ~$160M YoY, driving improved cash and competitiveness. “We are relentless on waste and inefficiency...”
  • Americas operating improvement: Segment OP rose to $135M (+27% YoY) on cost reductions and ~4% volume growth; net price stable amid tight capacity.
  • Raised FY25 adjusted EPS guidance to $1.30–$1.55 and reaffirmed free cash flow $150–$200M, despite $140–$150M cash restructuring.

What Went Wrong

  • Europe softness: Segment OP fell to $90M (from $127M) on ~9% volume decline, unfavorable net price, and temporary curtailments; July shipments down mid-single digits.
  • Reported EPS negative due to $108M restructuring/impairment (MAGMA discontinuation), reducing EBT to $7M vs $104M prior year.
  • Ongoing curtailments likely to persist into Q4 while European restructuring timelines extend, elevating tax rate sensitivity when earnings are seasonally lower.

Financial Results

Consolidated Headlines (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.5 $1.567 $1.706
Diluted EPS (GAAP) ($)$(1.00) $(0.10) $(0.03)
Adjusted Diluted EPS ($)$(0.05) $0.40 $0.53
Earnings Before Income Taxes ($M)$(125) $18 $7
Segment Operating Profit ($M)$136 $209 $225

YoY Comparison (Q2 2024 → Q2 2025)

MetricQ2 2024Q2 2025
Revenue ($USD Billions)$1.729 $1.706
Diluted EPS (GAAP) ($)$0.36 $(0.03)
Adjusted Diluted EPS ($)$0.44 $0.53
Segment Operating Profit ($M)$233 $225
Segment OP Margin (%)13.7% 13.4%
Gross Profit ($M)$303 $299

Actual vs S&P Global Consensus (Q2 2025)

MetricConsensusActualSurprise
Adjusted EPS ($)0.41*0.53 +0.12; +29% (bold beat)
Revenue ($USD Billions)1.709*1.706 -0.003; -0.2% (in-line/slight miss)
EBITDA ($M)309*281*-28; -9% (miss)

Values retrieved from S&P Global.*

Segment Breakdown (Q2 2024 → Q2 2025)

SegmentNet Sales ($M) Q2 2024Net Sales ($M) Q2 2025Segment OP ($M) Q2 2024Segment OP ($M) Q2 2025Segment OP Margin (%) Q2 2024Segment OP Margin (%) Q2 2025
Americas899 943 106 135 11.8% 14.3%
Europe802 741 127 90 15.8% 12.1%
Total1,701 1,684 233 225 13.7% 13.4%

KPIs and Operating Drivers

KPIQ2 2025Context
Fit to Win savings ($M)$84 $145 YTD; target ≥$250 in 2025
Shipment volumes (global)~-3% YoY YTD +~1%
Americas volumes~+4% Q2 Driven by beer/spirits rebound
Europe volumes~-9% Q2 Curtailments; price pressure
Retained corporate & other costs ($M)$25 Down from $32 YoY
Net interest expense ($M)$85 Slightly lower vs $87 YoY
Inventory reduction ($M)~$160 YoY Target <50 days IDS

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$1.20–$1.50 $1.30–$1.55 Raised
Free Cash Flow ($M)FY 2025$150–$200 $150–$200 Maintained
Sales VolumesFY 2025In line with prior year In line with prior year Maintained
Adjusted ETR (%)FY 2025~33–36% ~33–36% Maintained
Cash Restructuring ($M)FY 2025$120 $140–$150 Raised
Americas closures charges ($M)Q3 2025N/A~45 New item

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Fit to Win cost programPhase A/Phase B launched; $25M Q4 savings; 2025 savings $175–$200M; network optimization 7% capacity actions $61M Q1 savings; SG&A actions complete; TOE rollout beginning $84M Q2 savings; YTD $145M; TOE first wave of 15 plants; supplier agreements Accelerating execution
MAGMA programBowling Green ramp milestones critical; Gen 3 paused; returns ≥WACC+2% required Continued evaluation Halted further MAGMA development; Bowling Green pivot to premium under “Best at Both” Strategic exit / redeploy to premium
Tariffs/macroModeled limited direct exposure; potential substrate tailwinds; FX headwinds expected Cautious outlook; some prebuy; aluminum tariff may narrow cost gap Outlook cautions; clarity still evolving; July shipments down mid-single digits Continued uncertainty; modest demand drag
Regional trendsAmericas growth; Europe soft, price pressure Americas strong; Europe mixed with curtailments Americas OP +$29M YoY; Europe OP -$37M YoY; UK/Northern Europe stabilizing late Q3 Divergent; gradual European stabilization expected
Inventory / curtailments~17% curtailed capacity in Q4; inventory reduction focus Curtailments front-loaded; inventories targeted <50 days More temporary downtime provision in Q4 if restructuring slips; inventories down ~$160M YoY Improving inventories; downtime persists near-term
Premiumization & product mixPremium focus; portfolio shift Spirits rebound in Americas; food/NAB strength Bowling Green pivot to premium spirits; NPD pipeline +35% Expanding premium initiatives

Management Commentary

  • “We achieved $84 million in savings this quarter, bringing our first half total to $145 million… we remain confident in achieving our 2025 savings target of at least $250 million.” – CEO Gordon Hardie
  • “We have made the financially prudent decision to halt further MAGMA development and operations… ‘Best at Both’ can drive higher premium output at lower operating cost and capital intensity.” – CEO Gordon Hardie
  • “Segment operating profit improved significantly in the Americas… In Europe, segment operating profit declined due to lower net price and softer sales volumes.” – CFO John Haudrich
  • “We are raising our full year guidance and now expect adjusted earnings to range between $1.30 and $1.55 per share.” – CFO John Haudrich

Q&A Highlights

  • Volumes/segment cadence: Management expects FY25 volumes roughly flat with the prior year; H2 mix may invert relative to H1 due to comps; temporary downtime could be higher in Q4 if European restructuring timing slips.
  • Bowling Green plan: Pivoting to premium spirits in the U.S. under “Best at Both,” targeting lower operating cost and capital intensity than MAGMA; specifics on cash cost to be provided later.
  • Corporate cost run-rate: Retained corporate costs guided to ~$100–$120M per year; Q2 corporate costs improved to $25M.
  • Net price pressure moderating: First-half net price headwind ~$70M; full-year now expected ~$100–$125M, less than prior assumptions due to moderating inflation/energy.
  • Working capital/free cash flow: Working capital expected to be a $0–$50M tailwind; FY free cash flow still $150–$200M despite higher restructuring cash costs.
  • Mexico/beer opportunities and NPD: Medium/long-term attractive, with readiness to support growth; NPD pipeline up ~35%.

Estimates Context

  • Q2 2025: Adjusted EPS $0.53 vs $0.41 consensus (bold beat); revenue $1.706B vs $1.709B consensus (in-line/slight miss); EBITDA $281M vs $309M consensus (miss).*
  • Q1 2025: Adjusted EPS $0.40 vs $0.236 consensus (beat); revenue $1.567B vs $1.561B consensus (in-line/beat); EBITDA $269M vs $274M consensus (slight miss).*
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong execution: O-I delivered a bold adjusted EPS beat and raised FY25 EPS guidance, driven by accelerating Fit to Win savings and Americas strength; Europe remains the drag but is stabilizing as curtailments ease.
  • Narrative shift: Strategic exit from MAGMA reduces risk and redeploys capital to “Best at Both” premium operations—near-term charges, but improved cost/returns outlook.
  • Watch Q4 dynamics: Management flagged more temporary downtime and tax rate sensitivity in seasonally soft Q4; near-term volatility possible despite FY targets intact.
  • Cash improving: Inventory reductions and lower capex support free cash flow recovery to $150–$200M even with higher restructuring cash costs.
  • Americas momentum: Tight capacity and cost actions are lifting margins; continued resilience in beer/spirits, plus growth in food/NAB.
  • Europe recovery path: Network optimization and cost work, plus potential trade clarity, should improve margins; near-term price pressure/curtailments persist.
  • Estimates recalibration: Sell-side should raise FY EPS post beat and guidance raise; near-term EBITDA misses reflect Europe downtime—expect upward estimate revisions for EPS with cautious EBITDA trajectory.*

Values retrieved from S&P Global.*