This audio is auto-generated. Please let us know if you have feedback.
By the numbers: Q1 2025
Net sales: $1.57B
Down 1.6% year over year
Net loss attributable to O-I: $16M
Compared with net earnings of $72M in Q1 2024
- Q1 recap: CEO Gordon Hardie said on an earnings call Wednesday that O-I is “pleased with our year-to-date performance trend despite some anticipated lag in Europe.” Quarterly sales were down slightly, in part due to lower net price and ongoing temporary production curtailments to reduce inventory. O-I’s ongoing “Fit to Win” program resulted in savings of $61 million in Q1, which Hardie called “a significant contributor to our better-than-expected results,” en route to a target of $250 million in savings in 2025.
- Shipment trends: Shipments rose 4.4% in Q1, exceeding 4% across the Americas, Hardie said. Executives said growth was partly supported by some customers rebuilding packaging inventories, as well as advanced purchases in light of new tariff policies. Volume increases across markets were also driven by “a strong rebound in beer and spirits,” Hardie said, with food performing well too. Volumes are up roughly 3% year-to-date through April, the company reported, though some demand is also softening amid tariff-related uncertainty.
- Tariffs exposure: Executives detailed that about 14% of O-I’s global sales volumes — both empty and filled bottles — cross U.S. borders, and about 4.5% is exposed to new tariffs. “This primarily relates to imports of filled containers from Europe, while most cross-border sales between the U.S., Mexico and Canada are exempt under the USMCA treaty,” explained CFO John Haudrich. “The bigger unknown is how elevated market uncertainty may impact the consumer and demand elasticity.”
- Tariffs upside: Amid global supply chain uncertainty, O-I believes the glass business benefits from its local nature. Around 85% of the value chain exists within 300 miles of the plant, Haudrich said. “Favorable substrate dynamics may emerge as there are currently sector-specific tariffs on aluminum,” he said. “Likewise, domestic glass production is now significantly more competitive compared to imports from China, given new tariffs.” O-I’s U.S. network stands to capitalize on any future shifts to domestic production, he said.
- Competitiveness vs. aluminum: In recent months, O-I executives have repeated a focus on competing better against aluminum cans. Now, aluminum-specific tariffs may improve cost parity for glass, executives explained. O-I has said that glass containers in North America come at a 25% to 30% cost premium over aluminum alternatives. “If that goes to 15% or lower, historically we've seen shifts over to glass, and we believe that the difference on the aluminum tariff side could impact that call it 5%, 10% points against that 25% to 30% premium. So it could help,” Haudrich said.
- Adjustments in Europe: Hardie reported that O-I is currently “addressing excess capacity in Europe through temporary curtailments and we are in consultation with the European and local works councils, regarding long term restructuring actions.” The company is trying to reduce inventories in that region to 50 days or less. Additionally, O-I is working on realigning its footprint in France, including some closures, to respond to changing trends in the wine and spirits markets, to support “being the lowest cost producer in mainstream and best cost producer in premium,” Hardie said.
- Outlook: O-I said it was reaffirming full-year 2025 guidance, projecting adjusted earnings to improve between 50% and 85% from 2024, or within the range of $1.20 to $1.50 per share. Free cash flow is estimated between $150 million and $200 million. Still, this “may not fully reflect the potential impact of sustained elevated uncertainty across the value chain related to changing global trade policies,” the company reported. O-I intends to reassess its sales volume outlook at mid-year.
