O-I Glass cuts 2026 guidance as costs and tariffs rise

By Daniel Okafor

O-I Glass now expects 2026 adjusted earnings before interest, taxes, depreciation and amortization of $925 million to $950 million, down from its $1.25 billion to $1.3 billion target.

O-I made the revision in Tuesday’s earnings release. The company has lowered the range each quarter since entering 2026, citing energy and freight cost inflation, softer demand and a slow recovery in Europe.

Third-quarter shipments fell 2%. O-I reported that sales in its food and non-alcoholic beverage categories continued to outperform alcohol.

CFO John Haudrich said on Wednesday’s earnings call:

“We expect stable sales volume with new business wins offsetting sluggish demand,” but “demand will likely remain subdued until affordability pressures ease.”

O-I reported European sales volumes down 3.7%. Performance in the Americas improved on a sequential basis, but sales volumes remained 1.3% lower year over year. The company said capacity was tighter in the Americas than in Europe.

Among the notable headwinds in the Americas, O-I cited U.S.-Canada trade disputes and an earthquake in South America. In Europe, energy and freight costs exceeded O-I’s estimates by $15 million.

CEO Gordon Hardie said:

“Europe remains our key focus and largest opportunity for value creation. The segment has significantly underperformed our expectations this year. Commercial pressures and elevated energy and freight costs created a difficult backdrop, while internal supply chain challenges amplify the impact.”

How O-I Glass is containing costs

O-I said its four-pronged recovery plan targets four areas:

• Improved net price
• Better energy procurement risk management and usage
• An improved end-to-end supply chain
• Profitable volume growth

Under O-I’s ongoing “Fit to Win” restructuring and performance improvement plan, which runs through 2027, the company reported $50 million in benefits during the third quarter and $135 million year to date.

O-I said all previously announced network closures were complete. The company was also taking steps that could lead to the closure of another production facility in Europe.

Haudrich said O-I had revamped its energy procurement practices. One challenge was the expiration of a beneficial five-year contract at the end of 2025.

O-I has secured all of its European natural gas needs for the fourth quarter. Haudrich said:

“Barring extreme price spikes or supply disruption, this coverage should significantly limit further changes in direct gas costs for the remainder of the year.”

O-I expects European energy inflation may not peak until Q1. That leaves freight costs and the potential for additional energy pressure as continuing risks to the company’s recovery.

What changes for O-I Glass in 2026?

With 2026 drawing to a close, O-I expects full-year volumes to fall 3% to 4% from 2025. New business wins underpin Haudrich’s stable-volume expectation, but affordability pressure and Europe’s slow recovery keep the annual forecast negative.

O-I projects a $10 million tariff impact in North America. About 2% of the company’s volume crosses the U.S.-Canada border, Haudrich said, “and so who knows how long that will endure.”

The immediate test is narrow: absorb $10 million in tariff costs, contain European gas spending and take steps on a possible additional plant closure while full-year volumes decline. O-I’s reset guidance leaves less room for another cost shock than its original target.