OI Updates Outlook: Challenging Market Conditions in Asia Pacific and Higher Manufacturing Costs to Negatively Impact Second Quarter Results

The management of Owens-Illinois, Inc. OI intends to update the Company's second quarter business outlook today at the Deutsche Bank Global Industries and Basic Materials Conference. Entering the period, the Company anticipated second quarter results would be in line with the prior year, but O-I now expects second quarter adjusted net earnings will be down from the prior year period. Segment operating profit margins in the second quarter of 2011 will likely decline between 3 and 6 percentage points from second quarter 2010 levels. O-I continues to expect global shipment levels will increase between 5 and 10 percent in the second quarter, compared to the prior year, driven primarily by several acquisitions made in 2010. Demand remains strong across most markets and end-use categories, with the notable exceptions of Australia and New Zealand and beer in North America. Yet, higher than expected costs will more than offset the benefit of stronger global shipments. While significant cost inflation was already anticipated heading into the second quarter, O-I also has incurred additional manufacturing and delivery costs. As a result, O-I will not fully realize the operating leverage expected from higher production levels in the second quarter of 2011.