O-I Glass Earnings: Volume Growth and Cost Savings Spark Excitement Despite Macro Uncertainty

Narrow-moat-rated O-I Glass reported solid first-quarter results due to volume growth across its portfolio and cost savings. Net sales declined 1.5% year over year as growth in the Americas was offset by lower selling prices in Europe. Temporary production curtailments have largely ceased in the Americas, but O-I continued managing its production and inventory in Europe during the quarter. That said, O-I continues to make progress with its “Fit to Win” program, which generated $61 million in cost savings in the first quarter, and O-I expects to generate $250 million of total cost savings in 2025, a significant step in the right direction for the company. While overcapacity and pricing headwinds in Europe remain a concern, we are encouraged by the cost reduction progress and volume growth in the first quarter. Nevertheless, we have decreased our fair value estimate to $20 from $22 per share due to lower near-term results in Europe.