Owens-Illinois (OI) Q3 Earnings: Is A Beat In The Cards?

OWENS-ILLINOIS Price and EPS Surprise | OWENS-ILLINOIS Quote

What's Driving the Better-Than-Expected Earnings?

Owens-Illinois expects the contribution from the legacy business to be up in the third quarter and guided earnings to be within 65–70 cents per share in the quarter. Compared with the prior-year adjusted earnings per share of 57 cents, the mid-point of the range reflects an 18% year-over-year growth. While currency-related headwinds are expected to be moderate compared with the trend over the past 18 months, the impact of Brexit creates an uncertainty.

In North America, results for the third quarter will be much higher than prior year due to favorable conditions for its legacy business operations. Additionally, the region will gain from a full-quarter result from the Packaging Solutions business.

Continued solid execution in Europe, benefits of strategic initiatives and increase in sales volume will help mitigate challenges related to the ongoing modest cost-price headwind and the impact of Brexit.

In Latin America, the momentum from the first half of the year is anticipated to continue in the third quarter as well. Mexico will be a major contributor to the substantial increase in operating profit. Strong operations, disciplined cost control and benefits from new product development are expected to counter mid-single-digit decline in legacy volume. In the Asia Pacific, results will be nearly flat with the prior year as favorable development in sales volumes and cost cuts will be neutralized by inflation and lower production volume.

Stocks to Consider

Owens-Illinois is not the only stock looking up this earnings season. Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Casella Waste Systems Inc. (NASDAQ:CWST) has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NN Inc. (NASDAQ:NNBR) has an Earnings ESP of +4.35% and also sports a Zacks Rank #1.

Ball Corporation (NYSE:BLL) carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.

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