O-I Glass shipments were down 2% in the third quarter, with sales in O-I’s food and non-alcoholic beverage categories continuing to outperform alcohol, the company reported.
The company’s earnings release Tuesday illustrated another quarter of struggling in Europe, where sales volumes were down 3.7%. Performance in the Americas improved sequentially, but sales volumes were still down year over year by 1.3%. Capacity is tighter in the Americas than in Europe.
Notable headwinds in the Americas included U.S.-Canada trade disputes and an earthquake in South America. Meanwhile, in Europe, energy and freight costs exceeded estimates by $15 million.
“We expect stable sales volume with new business wins offsetting sluggish demand,” said CFO John Haudrich on an earnings call Wednesday, but “demand will likely remain subdued until affordability pressures ease.”
“Europe remains our key focus and largest opportunity for value creation,” said CEO Gordon Hardie. “The segment has significantly underperformed our expectations this year. Commercial pressures and elevated energy and freight costs created a difficult backdrop, while internal supply chain challenges amplify the impact.”
O-I says it has a four-pronged recovery plan to improve net price, energy procurement risk management and usage, end-to-end supply chain and profitable volume growth.
Managing costs
O-I reported that under its ongoing “Fit to Win” restructuring and performance improvement plan, which is outlined through 2027, there were $50 million worth of benefits in Q3 and $135 million year to date.
Regarding its network optimization plans, O-I said that all previously announced closures have been completed, although it’s taking steps to potentially close a production facility in Europe.
O-I has revamped its energy procurement practices, Haudrich said, noting that one challenge was the expiration of a beneficial five-year contract at the end of 2025. Haudrich said that the company has already secured all of its natural gas needs for Europe for Q4.
“Barring extreme price spikes or supply disruption, this coverage should significantly limit further changes in direct gas costs for the remainder of the year,” he said. Energy inflation in Europe may not peak until Q1, O-I expects.
Muted outlook
As 2026 draws to a close, O-I believes full-year volumes will be down 3% to 4% compared with 2025.
In North America, O-I projects a $10 million impact from tariffs. About 2% of O-I’s volume cross the U.S.-Canada border, said CFO John Haudrich, “and so who knows how long that will endure.”
The company again lowered earnings guidance, citing energy and freight cost inflation, softer demand and slow recovery in Europe.
O-I now expects 2026 adjusted earnings before interest, taxes, depreciation and amortization between $925 million and $950 million. Entering the year, O-I targeted $1.25 billion to $1.3 billion, a range it has lowered each quarter since.
