Libbey officials said that fighting to keep its market share had led to price cuts that dragged on profits.
A warning from Libbey Inc. that it will likely post a substantial first quarter loss sent shares tumbling more than 25 percent on Wednesday, driving the company’s closing price to its lowest level in more than five years and leading its chief executive officer to pledge cost cutting measures.
The Toledo company, which makes and markets a variety of table glassware for businesses and consumers, said it expects to report a first quarter loss of between $6 million and $8 million when it releases its full financial results early next month.
Last year Libbey reported a $700,000 profit in the first quarter. Analysts had expected similar results this year.
Libbey had told investors that it was likely facing weak profits in the first half of the year from a combination of continuing weakness in currency exchange rates and some large capital expenditures, including rebuilding furnaces in its plants.
But Libbey officials said Wednesday that fighting to keep its market share had led to price cuts that dragged on profits. It also said it has been affected by hedges it made in natural gas.
In a statement, Libbey Chief Executive Officer William Foley said the company expects to cut expenses by $5 million in response. Mr. Foley also said Libbey will adjust its its capital spending plan for 2017.
“We believe we are focused on the right areas to ensure that we emerge from this difficult environment as an even stronger leader in the industry," Mr. Foley said.
Libbey told investors it expects net sales of $173 million in the first quarter, compared to $183 million in last year’s first quarter.
Contact Tyrel Linkhorn at email@example.com or 419-724-6134.
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