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OG

O-I Glass, Inc. /DE/ (OI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered stable net sales at $1.653B with materially higher profitability: adjusted EPS $0.48 versus $(0.04) in Q3 2024, and segment operating profit up 63% to $235M, expanding reportable segment margins by 570 bps to 14.4% .
  • Consensus comparison: EPS beat ($0.48 vs $0.420*) and revenue was slightly below ($1.653B vs $1.656B*). Values retrieved from S&P Global.
  • Management raised FY2025 adjusted EPS guidance to $1.55–$1.65 (from $1.30–$1.55 prior) and maintained free cash flow guidance at $150–$200M despite higher restructuring, citing Fit to Win momentum ($75M in Q3; $220M YTD) .
  • Strategic execution accelerated: 13% capacity closures announced (8% complete), bank credit agreement refinanced, leverage tracking to mid‑3s by year-end; groundwork for higher earnings and FCF in 2026 with an anticipated ~$150M energy reset headwind and continued self‑help .
  • Key catalyst: guidance raise and visible margin expansion driven by Fit to Win, with disciplined exit of unprofitable business and network optimization positioning for durable improvement .

What Went Well and What Went Wrong

What Went Well

  • Significant margin expansion: reportable segment margin increased to 14.4% (+570 bps YoY) with segment operating profit up $91M YoY to $235M, driven by Fit to Win savings and improved production efficiency .
  • Americas and Europe profits surged: Americas SOP $140M (+59%), Europe SOP $95M (+70%), on cost reduction and higher production levels; net price favorable in Americas .
  • Quote (CEO): “O‑I delivered strong third‑quarter earnings along with substantially higher margins compared to the prior year period... delivering another $75 million of benefits in the third quarter and $220 million year‑to‑date” .

What Went Wrong

  • Volumes soft: shipments/tons down ~5% headline, with underlying ~2% softer consumer demand; Beer and Wine down, offset by growth in NAB, Food, RTD .
  • Net price headwind in Europe and temporary project start‑up impact; Europe volumes down modestly (flat excluding project) .
  • Higher interest and restructuring costs: net interest expense rose to $91M (Q3) due to refinancing fees; cash restructuring and legacy environmental settlement weighed on FCF despite improved earnings .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025
Net Sales ($USD Millions)$1,679 $1,706 $1,653
Reported Diluted EPS ($)$(0.52) $(0.03) $0.19
Adjusted EPS ($)$(0.04) $0.53 $0.48
Segment Operating Profit ($USD Millions)$144 $225 $235
Reportable Segment Margin (%)8.7% 13.4% 14.4%
EPS Consensus Mean ($)——0.4198*
Revenue Consensus Mean ($USD Millions)——1,655.98*

Values retrieved from S&P Global.

Segment Breakdown (Q3 2024 vs Q3 2025)

SegmentNet Sales Q3 2024 ($M)Net Sales Q3 2025 ($M)Segment Operating Profit Q3 2024 ($M)Segment Operating Profit Q3 2025 ($M)Margin Q3 2024Margin Q3 2025
Americas$940 $940 $88 $140 9.4% 14.9%
Europe$706 $688 $56 $95 7.9% 13.8%
Total Reportable$1,646 $1,628 $144 $235 8.7% 14.4%

KPIs and Operating Metrics

KPIQ3 2024Q2 2025Q3 2025
Fit to Win Savings ($M, quarterly/YTD)—$145 YTD $75 in Q3; $220 YTD
Net Interest Expense ($M)$87 $85 $91
Retained Corporate & Other Costs ($M)$31 $25 $26
Shipments/Tons Growth (headline)—(3%) (5%) headline; underlying (2%)
Inventory Days——~52–53 days; goal ~50 in 2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)FY 2025$1.30–$1.55 $1.55–$1.65 Raised
Free Cash Flow ($M)FY 2025$150–$200 $150–$200 Maintained
Adjusted Effective Tax Rate (%)FY 2025~33–36% ~33–36% Maintained
Restructuring Cash Costs ($M)FY 2025~$140–$150 (implied) Higher than expected opportunities; >$150 cumulative including legacy settlement Higher (execution accelerated)

Management noted FCF unchanged due to accelerated network optimization and a legacy environmental settlement, despite improved earnings trajectory .

Earnings Call Themes & Trends

TopicQ1 2025 (Apr)Q2 2025 (Jul)Q3 2025 (Nov)Trend
Fit to Win cost program$61M benefits; reaffirm ≥$250M FY25; ≥$650M by 2027 $145M YTD; momentum accelerating $75M in Q3; $220M YTD; tracking $275–$300M FY25 Strengthening, ahead of plan
Network optimization/capacity closuresCurtailments to rebalance inventories Announced furnace suspension/plant closure in Americas; ~$45M Q3 charges 13% closures announced; 8% complete; remaining 5% by early 2026; skewing to Europe Accelerating execution
Pricing/mix disciplineNet price pressure; focus on economic profit Americas net price slightly lower; Europe unfavorable Americas favorable net price; Europe net price headwind; higher gross price expected in 2026 Disciplined, selective exits
Category/volume dynamicsShipments up ~4.4% QoQ; softness emerging amid tariff uncertainty Americas volume +4%; Europe volume −9% Headline shipments −5%; underlying −2%; NAB/food/RTD up; beer/wine down Mixed; sequential improvement late Q3
Energy contracts reset (Europe)—Flagged contracts expiring end-2025 ~$150M 2026 headwind; offset by initiatives Known headwind; manageable
MAGMA program—Halted MAGMA; redeploy Bowling Green under “Best at Both” Focus on TOE and “Best at Both” for capacity unlock Pivot to higher-ROI ops
Regulatory/legal—Legacy environmental charges noted ~$15M legacy settlement paid; part of >$25M charges One-off, resolved

Management Commentary

  • “Stable top-line, significantly higher margins and earnings… delivering another $75 million of benefits in the third quarter and $220 million year‑to‑date… we are on pace to exceed our $250 million annual 2025 target” — CEO Gordon Hardie .
  • “We have communicated the closure of 13% of capacity… 8% is now complete, and all remaining actions should be completed by early next year” — CEO .
  • “We now expect adjusted earnings in the range of $1.55–$1.65 per share… Free cash flow is projected at $150–$200 million” — CFO John Haudrich .
  • “Exiting unprofitable business… frees up capacity for power SKUs… improving the quality of the portfolio” — CEO .
  • “Europe net price a headwind; volumes flat excluding a major project start‑up” — CFO .

Q&A Highlights

  • Volume drivers: Of the ~5% shipment decline, ~2% was softer demand; ~3% from network optimization, exits of unprofitable business, and light‑weighting; Americas exit accounts for ~1% and will continue episodically .
  • Capacity actions: 13% closures announced, 8% complete, remaining 5% early next year; more advanced in Americas, final stages in Europe; restructuring ~$140–$150M in 2025 with carryover in 2026 .
  • 2026 framework: Expect earnings up with gross price pass‑through of 2025 inflation, stable volumes, robust Fit to Win benefits; absorb ~$150M energy reset headwind; leverage moving to low‑3s by YE2026 .
  • Competitive substrate dynamics: Elevated aluminum narrows cost spread to within ~15% premium, improving competitiveness of glass versus cans; O‑I aims to reach ≤15% irrespective of aluminum .
  • Brazil/Europe color: Brazil beer volumes impacted by unusually cold winter and price increases; NAB, wine, spirits strong; Europe volumes pressured by project commissioning and export markets (US/China) but expected to normalize over time; inventory days ~52–53 targeting ~50 .

Estimates Context

  • Q3 2025 EPS vs consensus: $0.48 actual vs $0.420* consensus — beat.
  • Q3 2025 revenue vs consensus: $1.653B actual vs $1.656B* consensus — slight miss.
  • Implications: Street likely revises FY2025 EPS higher given guidance lift and margin traction; modest top‑line miss overshadowed by operating leverage and self‑help execution.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion is the story: reportable segment margins up to 14.4%, with SOP +$91M YoY on Fit to Win and production efficiency; expect continued cost/mix tailwinds into 2026 .
  • Guidance raise is a near‑term catalyst: FY2025 adjusted EPS increased to $1.55–$1.65; execution confidence supports estimate upward revisions and potential multiple relief .
  • Self‑help outweighs macro softness: disciplined exits of negative EP business and network optimization drive durability; remaining 5% closures (Europe) should complete early next year .
  • 2026 setup: anticipate higher earnings/FCF despite ~$150M energy reset; leverage trending lower; bank agreement refinanced at favorable economics .
  • Category mix pivot: exposure shifting toward faster‑growing NAB/RTD/food and premium segments; Beer/Wine headwinds manageable with mix/pricing discipline .
  • Watch restructuring/one‑offs: elevated restructuring and legacy environmental settlement limit FCF upside near term; normalization expected by mid‑2026 .
  • Trading lens: Prefer buying on dips into 2026 energy reset headline—operational momentum and guidance trajectory underpin earnings quality; monitor Europe price resets and execution timing on closures .