Packaging company Owens-Illinois, Inc yesterday reported its third quarter 2004 financial results. Earnings per share for the third quarter of 2004 were US$0.42 (diluted) compared with US$0.16 per share (diluted) for the third quarter of 2003.

Earnings in the third quarter of 2004 included a reduction in gross profit related to the step-up of BSN finished goods inventory as required by SFAS No. 141, which negatively impacted earnings by US$0.12 per share.

Earnings per share from continuing operations were US$0.52 per share for the third quarter of 2004 compared with US$0.43 per share for the third quarter of 2003.

Improved pricing in Glass Containers and Plastics Packaging, productivity improvements, and overhead cost reductions, along with BSN operations, accounted for an increase of US$0.20 per share over the prior year third quarter.

Increased interest expense, including the additional interest on borrowing for the BSN acquisition, accounted for a decrease of US$0.05 per share.

"We are gratified by our execution against our cash flow priorities, while continuing to demonstrate positive momentum in underlying earnings," said Steve McCracken, Owens-Illinois chairman and CEO.
Looking ahead, the company expects continued positive cash flows and growing underlying EBIT.

"EBIT pressures related to increasing costs for transportation, raw materials, energy and product substitutions versus plastic should be more than offset by European acquisition synergies, global initiatives in procurement, improved capital efficiency, product substitutions versus alternatives and industry consolidation," a statement said.

McCracken continued: "With the execution of the blow-molded plastic container sale and our voluntary prepayment of bank debt, our turnaround and transformation agenda passed some important milestones. However, we know that we must continue to execute against our primary priorities and core strategies to ensure positive cash flows and continuous earnings improvements moving forward."