Third quarter 2026
Filed Oct 27, 2026Americas Delivers Resilient Third-Quarter Performance Europe Remains Challenged; Recovery Actions Underway 2026 Outlook Updated; Higher Adjusted Earnings And Free Cash Flow Expected In 2027
Third-quarter net sales declined 2 percent, adjusted EBITDA fell to $234 million from $329 million, and the Europe segment's operating profit declined to $2 million from $95 million. The company reduced its 2026 adjusted EBITDA and free-cash-flow outlooks.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30, 2026GAAP | $1.62B | – | down 2 percent |
| Cost of goods sold, three months ended September 30, 2026GAAP | $1.43B | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $195M | – | – |
| Selling and administrative expense, three months ended September 30, 2026GAAP | $88M | – | – |
| Research, development and engineering expense, three months ended September 30, 2026GAAP | $7M | – | – |
| Interest expense, net, three months ended September 30, 2026GAAP | $86M | – | – |
| Equity earnings, three months ended September 30, 2026GAAP | $23M | – | – |
| Other expense, net (incl. goodwill impairment), three months ended September 30, 2026GAAP | $3M | – | – |
| Earnings before income taxes, three months ended September 30, 2026GAAP | $34M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $39M | – | – |
| Net earnings (loss), three months ended September 30, 2026GAAP | ($5 million) | – | – |
| Net earnings attributable to noncontrolling interests, three months ended September 30, 2026GAAP | ($8 million) | – | – |
| Net income (loss) attributable to the Company, three months ended September 30, 2026GAAP | ($13 million) | – | – |
| Basic earnings per share, three months ended September 30, 2026GAAP | ($0.08) | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | ($0.08) | – | – |
| Diluted average shares, three months ended September 30, 2026GAAP | 153.8M | – | – |
| Segment operating profit, three months ended September 30, 2026non-GAAP | $139M | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $234M | – | – |
| Adjusted earnings (loss), three months ended September 30, 2026non-GAAP | ($15 million) | – | – |
| Adjusted earnings (loss) per share, three months ended September 30, 2026non-GAAP | ($0.09) | – | – |
| Net sales, nine months ended September 30, 2026GAAP | $4.83B | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $608M | – | – |
| Earnings (loss) before income taxes, nine months ended September 30, 2026GAAP | ($846 million) | – | – |
| Net income (loss) attributable to the Company, nine months ended September 30, 2026GAAP | ($1,058 million) | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | ($6.90) | – | – |
| Segment operating profit, nine months ended September 30, 2026non-GAAP | $451M | – | – |
| Adjusted earnings (loss), nine months ended September 30, 2026non-GAAP | $8M | – | – |
| Adjusted earnings (loss) per share, nine months ended September 30, 2026non-GAAP | $0.05 | – | – |
| Cash provided by operating activities, three months ended September 30, 2026GAAP | $165M | – | – |
| Cash payments for property, plant and equipment, three months ended September 30, 2026GAAP | ($81 million) | – | – |
| Cash provided by (utilized in) operating activities, nine months ended September 30, 2026GAAP | ($35 million) | – | – |
| Cash payments for property, plant and equipment, nine months ended September 30, 2026GAAP | ($318 million) | – | – |
| Cash utilized in investing activities, nine months ended September 30, 2026GAAP | ($296 million) | – | – |
| Cash utilized in financing activities, nine months ended September 30, 2026GAAP | ($61 million) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Americas, three months ended September 30, 2026A 1.6 percent increase in selling prices and favorable currency translation more than offset a 1.3 percent decline in sales volume, measured in tons. Strong shipment growth in Latin America largely offset headwinds in North America. | $970M | – | up more than 3 percent |
| Europe, three months ended September 30, 2026The decline reflected 3.8 percent lower selling prices, a 3.7 percent decrease in sales volume, measured in tons, and unfavorable currency translation. Shipments increased in Northern Europe, while Southern Europe remained under pressure, particularly in wine. | $634M | – | down 8 percent |
| Americas, nine months ended September 30, 2026Effects of changing foreign currency rates were $143 million, price was $74 million, and sales volume & mix was ($183 million). | $2.79B | – | – |
| Europe, nine months ended September 30, 2026Effects of changing foreign currency rates were $72 million, price was ($94 million), and sales volume & mix was ($80 million). | $1.99B | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- NoteAdjusted EBITDA: $925-$950 million
- NoteFree Cash Flow: ~ ($300 million)
- NoteLeverage Ratio: 4.5 – 5.0x
- NoteFit to Win: approximately $180 million of net benefits this year
- NoteAt least $650 million of cumulative Fit to Win benefits by the end of 2027
- NoteRelated charges of approximately $100 million to $120 million will be recorded in the fourth quarter of 2026, including approximately $40 million to $50 million of future cash expenditures
Capital returns
- Shares repurchased, three months ended September 30, 2026: ($10 million)
- Shares repurchased, nine months ended September 30, 2026: ($30 million)
What drove it
- Fit to Win delivered approximately $50 million of benefits during the third quarter and $135 million year-to-date.
- Fit to Win benefits mostly offset lower volume and unfavorable net price in the Americas.
- Energy and freight costs were approximately $15 million higher than originally anticipated in Europe.
- Favorable operating costs offset the impact of lower sales volume in Europe.
- Europe made progress improving plant efficiency following first-half restructuring.
- The prior year benefited from a $6 million one-time insurance claim in the Americas that did not repeat.
Concerns
- Europe segment operating profit was $2 million, compared with $95 million in the prior-year period.
- Competitive pricing pressure and elevated energy and freight costs weighed on Europe.
- Southern Europe remained under pressure, particularly in wine, a category that continues to suffer declining consumer and export volumes.
- The company cited continued soft demand, including the potential impact of U.S.-Canada trade disputes, further energy related cost inflation, slower pace of recovery in Europe and higher inventory levels due to softer shipments.
- The company currently estimates related charges of approximately $100 million to $120 million from a proposed permanent closure of a production facility in Europe.
- Net debt leverage ratio is expected to approximate 4.5 to 5.0 times at year end.
What to watch
- Execution of the detailed European recovery plan focused on commercial performance, energy costs, plant efficiency and supply-chain efficiencies.
- Whether improving European production efficiency and better sequential shipment trends convert into stronger commercial performance, lower costs and improved margins.
- Delivery of approximately $180 million of 2026 Fit to Win net benefits and at least $650 million of cumulative savings by the end of 2027.
- The proposed permanent closure of a production facility in Europe and related fourth-quarter charges.
- 2027 guidance, which the company plans to provide on its 2026 year-end earnings call.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $379 million
- Trade receivables, net as of September 30, 2026: $867 million
- Inventories as of September 30, 2026: $944 million
- Total assets as of September 30, 2026: $8,001 million
- Short-term loans and long-term debt due within one year as of September 30, 2026: $183 million
- Long-term debt as of September 30, 2026: $4,736 million
- Share owners' equity as of September 30, 2026: $536 million
- Total liquidity as of September 30, 2026: $1,533 million
- Revolving Credit Facility Capacity as of September 30, 2026: $1,154 million
- Change in cash, nine months ended September 30, 2026: ($380 million)
- At September 30, 2026, the amount of receivables sold by the Company was $457 million.
- For the nine months ended September 30, 2026, the Company's use of its factoring programs resulted in an increase of $74 million to cash utilized in operating activities.
Analysis
O-I reported third-quarter net sales of $1,623 million, down 2 percent from the prior-year period. Gross profit was $195 million versus $300 million, while net income attributable to the Company was a loss of $13 million versus net income of $30 million. Adjusted EBITDA was $234 million versus $329 million, and adjusted earnings per share was a loss of $0.09 versus $0.48.
The Americas remained the relative source of resilience. Net sales were $970 million, up more than 3 percent, supported by a 1.6 percent increase in selling prices and favorable currency translation. Segment operating profit was $137 million versus $140 million, with Fit to Win benefits and currency translation mostly offsetting lower volume and unfavorable net price. The prior-year period also included a $6 million one-time insurance claim that did not repeat.
Europe was the principal drag. Net sales were $634 million, down 8 percent, reflecting 3.8 percent lower selling prices, a 3.7 percent decline in sales volume, and unfavorable currency translation. Segment operating profit fell to $2 million from $95 million. Management cited competitive pricing pressure, internal supply-chain challenges, and energy and freight costs that were approximately $15 million above expectations entering the quarter. Europe segment operating profit margin was 0.3%, compared with 13.8% in the prior-year period.
Cash generation and leverage are central issues in the revised outlook. Cash provided by operating activities was $165 million in the quarter, while cash payments for property, plant and equipment were ($81 million). For the nine months ended September 30, 2026, cash utilized in operating activities was ($35 million) and cash payments for property, plant and equipment were ($318 million). Liquidity was $1,533 million as of September 30, 2026, including $379 million of cash.
The company lowered its 2026 adjusted EBITDA outlook to $925-$950 million from $1,000-$1,100 million and now expects free cash flow of approximately ($300 million), compared with the previous forecast of ($50)-($150) million. O-I also lowered expected 2026 Fit to Win benefits to approximately $180 million from at least $200 million, while maintaining its target of at least $650 million of cumulative benefits by the end of 2027. The company is no longer maintaining its 2027 targets and plans to provide 2027 guidance on its 2026 year-end earnings call.
Management, verbatim
Third-quarter results demonstrated continued resilience in the Americas, while Europe remained well below our expectations. Commercial pressures and elevated energy and freight costs weighed on results, compounded by internal supply-chain challenges that we are actively addressing. We are beginning to see initial progress, with improving European production efficiency, better sequential shipment trends and continued Fit to Win cost reductions. Our focus now is converting that initial progress into stronger commercial performance, lower costs and improved margins. While near-term energy and trade conditions remain uncertain, the actions underway, together with continued resilience in the Americas, are expected to support higher adjusted earnings and free cash flow in 2027 and strengthen the foundation for long-term value creation.
GORDO N HARDI E, CHIEF EXECUTIVE OFFICER
Our revised 2026 outlook reflects additional pressure from energy and freight cost inflation, continued soft demand and the slower pace of recovery in Europe. While these factors are weighing on near-term results and cash flow, our liquidity remains strong and we are committed to financial and operational discipline and execution. Looking ahead, we expect higher adjusted earnings and free cash flow in 2027, supported by improved commercial and operational performance in Europe, additional Fit to Win benefits, and continued resilience in the Americas. We remain focused on converting these actions into measurable financial improvement, strengthening free cash flow, and reducing leverage. We will provide specific 2027 guidance with our year-end results.
JOHN HAUDRICH, CHIEF FINANCIAL OFFICER
Not in the filing
stated, not guessed- Total gross margin for the third quarter and nine months ended September 30, 2026
- Total operating income for the third quarter and nine months ended September 30, 2026
- Quarterly free cash flow actual
- Dividend declaration or payment
- Total debt as of September 30, 2026
- Net debt as of September 30, 2026
- Actual leverage ratio as of September 30, 2026
- Adjusted effective tax rate
- Prior-quarter comparisons for reported financial metrics
- 2026 revenue, gross margin, operating-expense and tax-rate guidance
- Quantitative 2027 guidance
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.