O-I Glass’s sales volumes fell 4.5% in Q2 but were flat year over year by June, the company reported. O-I said that food and non-alcoholic beverage segments continue to trend better than alcohol end markets.
Disruptions limit European and American operations
The European business did $704 million in sales, suffering from unfavorable selling prices due to competition and higher energy costs stemming from conflict in the Middle East. Operating profit dropped from $90 million in Q2 2025 to just $6 million this past quarter.
There were also two notable facility disruptions in France and the U.K.: a fire and a leak. Given that O-I had closed some plants in Europe as part of restructuring, these events put extra pressure on the changing network that hadn’t yet settled and increased logistics costs, CEO Gordon Hardie explained during an earnings call Wednesday.
Executives believe the issues in Europe, while a major drag on Q2 results, are “largely transitional,” Hardie said.
O-I also estimates that a separate “furnace event” in the Americas limited sales opportunities there by about 2%. That disruption aside, O-I praised trends in the Americas, where shipments were down 7% but sales were up 1% year over year to $949 million, benefiting from higher selling prices. Looking ahead, O-I teased “accelerated rebuilds” and a new furnace starting up in Q3 to “enable growth.”
O-I mutes expectations for 2026 and 2027
Citing elevated operating costs from commercial pressures, higher energy costs in Europe, restructuring and the furnace events, O-I lowered its 2026 outlook for adjusted earnings before interest, taxes, depreciation, and amortization to $1 billion to $1.1 billion, from an original target of $1.25 billion to $1.3 billion.
“While these headwinds are expected to gradually improve over the balance of the year, we believe the revised guidance appropriately reflects the current operating environment,” stated O-I CFO John Haudrich.
O-I also went ahead and updated 2027 guidance. At its 2025 investor day, O-I reportedly projected 2027 adjusted EBITDA could be $1.45 billion. It’s now targeting $1.2 billion to $1.3 billion, “to reflect a more gradual rate of improvement in Europe.” Executives emphasized that they are not changing their strategy, just “realigning the timeline.”
O-I’s “Fit To Win” cost savings program continues. O-I calculated $65 million in gross savings in Q2 — $50 million savings net of operational disruptions. O-I still expects about $200 million in benefits in 2026.
