Composites and building materials company Owens Corning (OC) on Wednesday reported a 2 percent increase in profit for the third quarter from last year, reflecting higher revenues and slightly lower expenses that helped offset an increase in one-time charges.
Looking ahead, Owens Corning said that continued weakness of roofing market shipments in the second half of the year creates $15 million of downside risk compared to last year's adjusted EBIT performance of $416 million.
Mike Thaman, CEO of Owens Corning said, "Insulation and Composites delivered strong performance in the third quarter. Both of these businesses have grown revenue and earnings since the third quarter of 2013, producing strong operating leverage."
The company's net earnings for the third quarter was $52 million or $0.44 per share, up from $51 million or $0.43 per share in the year-ago period.
In the latest quarter, the company incurred, among other items, $21 million of charges associated with its decision not to rebuild two high-cost furnaces in Composites. The company noted that the actions represent the final steps necessary to achieve its business goal of 75 percent low-delivered cost assets.
Excluding items, adjusted earnings for the latest quarter were $74 million or $0.63 per share, compared to $66 million or $0.56 per share in the prior-year quarter. On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 5 percent to $1.38 billion from $1.32 billion during the same period last year. Analysts had a consensus revenue estimate of $1.39 billion.
According to Owens Corning, composites grew earnings by 50 percent in the latest quarter on positive price trends, while in roofing, prices stabilized late in the quarter.
Total operating expenses for the quarter declined to $144 million from $147 million in the year-ago period.
The company's board of directors proposed a quarterly dividend of $0.16 per share, payable on November 4, to shareholders of record as of October 20.
Looking ahead, Owens Corning said that continued weakness of roofing market shipments in the second half creates $15 million of downside risk compared to last year's adjusted EBIT performance of $416 million. The company had previously forecast full-year adjusted EBIT to grow versus 2013.
In the Roofing segment, Owens Corning now anticipates that the second-half and full-year roofing market will be down from the prior year. The company expects operating margins for the segment in 2014 to be lower than its guidance of average operating margins of mid-teens or higher.
OC is trading at $32.31, up $1.61 or 5.24 percent on a volume of 1.19 million shares.
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