Citi Previews OI 1Q

Citi expects solid overall 1Q results from Owens Illinois, Inc. (NYSE: OI), “driven by stronger global organic volume growth, benefits from recent M&A/capacity expansion and bigger F/X tailwind, offset somewhat by transitory issues (seasonal rebuilds, Aussie flooding, etc). and rising cost pressures.”

“While we believe mgmt's full yr inflation forecast ($0.70 / share at midpoint) left some cushion, our sense is that +$120/bbl oil (Brent crude most important) will likely put cost guidance at least to upper end of inflation range,” Citi writes. “With its largest global competitor launching an IPO (and #3 player also publicly discussing floatation) we would expect this to help support a rational pricing backdrop, and prices to ultimately catch up.”

Owens Illinois closed Thursday at $30.10.