O-I Glass Cuts Outlook as European Profit Collapses
The glass-container maker posted a $972 million net loss after a large European goodwill impairment.
O-I Glass (OI), the glass-container maker, cut its 2026 outlook after European segment operating profit fell to $6 million from $90 million as pricing pressure and operational disruptions weighed on results.
The quarter marked a sharp regional divergence. Americas profit increased despite lower shipments, while unfavorable European pricing contributed an $85 million profit decline and elevated energy costs added pressure.
Second-quarter net sales fell 2% to $1.668 billion from $1.706 billion a year earlier as stable selling prices and favorable currency translation partly offset a 4.5% decline in volumes. Adjusted earnings dropped to $0.09 a share from $0.53, including a $0.18-a-share hit from a higher adjusted tax rate tied to lower European earnings and the revised outlook.
Gross profit declined to $214 million from $299 million, compressing gross margin to 12.8% from 17.5%. Total segment operating profit fell 24% to $171 million, and segment margin narrowed to 10.3% from 13.4%.
Americas net sales increased nearly 1% to $949 million as 4% higher selling prices and favorable currency translation offset a 7% volume decline, which included a roughly 2% shipment constraint from a furnace event. Segment operating profit rose 22% to $165 million, with margin expanding to 17.4% as pricing, Fit to Win savings and currency benefits outweighed lower volume and furnace-event costs.
Europe sales fell 5% to $704 million, reflecting 4% lower selling prices and a 2% volume decline linked to restructuring disruptions and two furnace events. Fit to Win produced $65 million of gross quarterly benefits, though operational disruptions reduced the net benefit to $50 million.
O-I now expects 2026 adjusted EBITDA of $1.0 billion to $1.1 billion, down $125 million at both ends of its prior range. It also expects free cash flow to be a $50 million to $150 million use of cash, compared with its previous forecast for generation of the same amount, and sees net-debt leverage at or slightly above four times.
The reported loss reflected an $873 million noncash European goodwill impairment and a $96 million increase in European deferred-tax valuation allowances. O-I stopped providing adjusted-earnings guidance as its expected effective tax rate widened to 40% to 70%, and it lowered its 2027 adjusted EBITDA target to $1.2 billion to $1.3 billion while reducing expected cumulative net Fit to Win benefits to $650 million.