Owens-Illinois Inc., a maker of glass containers for beverages and other consumer goods, said it will shut down additional manufacturing capacity above what was previously announced, citing weakening demand in the slumping economy.The company also reduced its expectations for cash flow this year and announced a $350 million stock-buyback plan.
The company's shares sank Tuesday on the New York Stock Exchange. In 4 p.m. trading, they were down 17% at $29.36.
Owens-Illinois now anticipates 2008 cash flow -- which it defines as revenue from continuing operations minus capital expenditures -- of $332 million to $400 million instead of earlier expectations of $500 million. The company blamed weaker demand and the increased production cuts for the lowered forecast.
In commenting on the company's stock-buyback plan, which lasts through 2010, Chairman and Chief Executive Al Stroucken said current share prices don't reflect Owens-Illinois' long-term value. The stock through Monday was down 28% this year, and 20% this month alone. The firm's market capitalization is about $6 billion.
Wall Street Journal; September 17, 2008
