Owens Illinois (OI) has reported 535.29 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $108 million, or $0.66 a share in the quarter, compared with $17 million, or $0.10 a share for the same period last year. On an adjusted basis, earnings per share were at $0.68 for the quarter compared with $0.57 in the same period last year. Revenue during the quarter grew 9.32 percent to $1,712 million from $1,566 million in the previous year period. Gross margin for the quarter expanded 200 basis points over the previous year period to 19.63 percent. Total expenses were 72.37 percent of quarterly revenues, down from 74.46 percent for the same period last year. This has led to an improvement of 209 basis points in operating margin to 27.63 percent.
Operating income for the quarter was $473 million, compared with $400 million in the previous year period.
"Im pleased with our performance during the quarter and the progress were making against our strategic initiatives," said chief executive officer Andres Lopez. "The steady, year-on-year improvement weve achieved despite difficult market conditions reflects the strength of our team, our plan and our solid operational performance. For the full year, were still expecting a double-digit increase in earnings and continued deleveraging driven by strong cash flow."
For the financial year 2016, Owens Illinois expects adjusted net income to be in the range of $369 million to $377 million. For fiscal year 2016, the company expects diluted earnings per share to be in the range of $2.27 to $2.32 on adjusted basis.
Operating cash flow improves significantlyOwens Illinois has generated cash of $220 million from operating activities during the nine month period, up 113.59 percent or $117 million, when compared with the last year period. The company has spent $282 million cash to meet investing activities during the nine month period as against cash outgo of $2,638 million in the last year period. It has incurred net capital expenditure of $253 million on net basis during the nine month period, down 15.10 percent or $45 million from year ago period.
The company has spent $39 million cash to carry out financing activities during the nine month period as against cash inflow of $2,322 million in the last year period.
Cash and cash equivalents stood at $294 million as on Sep. 30, 2016, up 8.89 percent or $24 million from $270 million on Sep. 30, 2015.
Working capital drops significantly
Owens Illinois has witnessed a decline in the working capital over the last year. It stood at $409 million as at Sep. 30, 2016, down 27.48 percent or $155 million from $564 million on Sep. 30, 2015. Current ratio was at 1.20 as on Sep. 30, 2016, down from 1.29 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 15 days for the quarter from 50 days for the last year period. Days sales outstanding went down to 48 days for the quarter compared with 49 days for the same period last year.
Days inventory outstanding has decreased to 35 days for the quarter compared with 72 days for the previous year period. At the same time, days payable outstanding went down to 68 days for the quarter from 71 for the same period last year.
Debt comes down marginally
Owens Illinois has recorded a decline in total debt over the last one year. It stood at $5,595 million as on Sep. 30, 2016, down 4.51 percent or $264 million from $5,859 million on Sep. 30, 2015. Total debt was 58.91 percent of total assets as on Sep. 30, 2016, compared with 61.33 percent on Sep. 30, 2015. Debt to equity ratio was at 10.86 as on Sep. 30, 2016, up from 6.67 as on Sep. 30, 2015.
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