Owens Corning Builds Profits from Housing Recovery in Third-Quarter 2015, Holds Capex for Year at $380 Million

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Researched by Industrial Info Resources (Sugar Land, Texas)--Owens Corning (NYSE:OC) (Toledo, Ohio), a leading developer and manufacturer of insulation, roofing and fiberglass composites, continued to benefit from a recovering U.S. housing market in third-quarter 2015, as strong demand for insulation products led a growth in sales and profits across all segments. Industrial Info is tracking $280 million in active projects involving Owens Corning.

Among the projects tracked is the $90 million renovation of a mineral wool insulation plant in Joplin, Missouri. Owens Corning is overhauling 330,000 square feet of space and installing supporting & production-line equipment to manufacture Thermafiber mineral wool insulation. Crossland Construction Company Incorporated (Columbus, Kansas) is serving as general contractor. The renovation is expected to wrap up in the fourth quarter of 2016.

Net earnings for the third quarter were reported to be $112 million, more than double the $52 million of third-quarter 2014; while net sales stood at $1.46 billion, a 5.72% increase. In particular, the Insulation segment continued to show strength as growth persisted in the U.S. housing market, marking its 17th consecutive quarter of growth in earnings before interest and taxes; revenues in the segment grew at a double-digit rate. Stronger pricing, volumes and manufacturing performance boosted the Composites and Roofing segments.

Capital expenditures for the quarter were reported to be $89 million, compared with $91 million in the same period last year.

"The Insulation business grew at double-digit rates, reflecting the improved housing activity in the second half of the year," said Mike Thaman, the chairman and chief executive officer of Owens Corning, in remarks accompanying the quarterly earnings release. "All three businesses performed at double-digit margin levels in the quarter, as a result of positive macro-trends and solid commercial and operational execution."

Capital expenditures are expected to total $380 million for the full year, which is unchanged from last quarter's prediction. Owens Corning executives expect the improvement in the U.S. housing market to continue through the end of the year, with a steady performance in the roofing shingles market and stronger pricing in the insulation market attributed to continued growth in housing starts. A long-term drop in asphalt prices is expected to benefit the company to the tune of $60 million.

"With our current guidance, we're expecting more than 20% growth in the company's full-year EBIT performance. On a year to date basis, all of our businesses are ahead of last year and we expect that our overall corporate performance will be driven by full-year margin improvement in all three businesses. Our current performance and the positive momentum in our markets puts us on track for double-digit margin performance in all three businesses in 2016."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.