- THE MAGAZINE
- NEW PRODUCTS
- CI Advanced Microsite
- CI Top 10
- Raw & Manufactured Materials Overview
- Classifieds & Services Marketplace
- Product & Literature Showcases
- Virtual Supplier Brochures
- Market Trends
- Material Properties Charts
- List Rental
- Custom Content & Marketing Services
Owens Corning recently reported consolidated net sales of $1.2 billion during the second quarter of 2009, compared with $1.6 billion in the second quarter of 2008. The quarter was highlighted by continued strong performance in Roofing sales, which were up 14% compared with the second quarter of 2008. The prolonged downturn in the U.S. housing market led to lower sales of insulation and other building materials. Composites sales were lower because of global economic weakness, which began in the fourth quarter of 2008.
Led by record Roofing earnings, Owens Corning's second quarter 2009 adjusted earnings were $62 million, or $0.49 per adjusted diluted share, compared with $40 million, or $0.31 per adjusted diluted share, in 2008. The company reported second quarter 2009 net earnings of $33 million, or $0.26 per diluted share, compared with $41 million, or $0.32 per diluted share, in 2008.
Earnings before interest and taxes (EBIT) for the 2009 second quarter were $88 million, compared with EBIT of $74 million during the same period in 2008. Adjusted EBIT for the second quarter of 2009 was $108 million, compared with $87 million in the second quarter of 2008. EBIT was $70 million for the first six months of 2009, compared with EBIT of $95 million during the same period of 2008. Adjusted EBIT for the first six months of 2009 was $140 million, compared with $143 million during the same period of 2008.
Gross margin as a percentage of sales was 21% in the second quarter of 2009, compared with 16% in the same period of 2008. Second quarter 2009 Marketing and Administrative expenses were $37 million less than the second quarter of 2008.
“Owens Corning achieved outstanding second quarter results led by record earnings in our Roofing business,” said Mike Thaman, chairman and CEO. “We have delivered strong financial performance and strengthened our balance sheet while responding to continued weakness in our other markets. On the strength of the first half of 2009, we are pleased to increase our outlook for free cash flow to $200 million or more for the year, implying free cash flow generation of at least $377 million during the second half of 2009.”
The business environment is expected to remain challenging through the second half of 2009. Capacity will remain curtailed, and costs and capital spending will be lower compared to 2008. The company is on track to deliver $160 million in cost savings during 2009. Capital expenditures will be approximately $225 million, which is a reduction of about $140 million compared with 2008, in each case excluding precious metal purchases. Depreciation and amortization is estimated to be $320 million for the year.
In the Composites segment, Owens Corning will continue to realize the benefits of additional synergies from the 2007 acquisition of Saint-Gobain's reinforcements and composite fabrics businesses and various cost-reduction actions taken in 2008 and 2009. Based on demand improvement in the Reinforcements business during the first and second quarters of 2009, the company believes that incremental demand improvement will continue through the remainder of the year. Production is expected to be maintained near current levels to reduce inventories. Considerable uncertainties remain in global markets, including the pace of any demand improvement and competitive pressures.
The continued weakness in the U.S. housing industry is expected to negatively affect demand in Owens Corning’s Building Materials segment throughout the remainder of 2009. In the Insulation business, despite significant cost and capacity actions, cost savings are not expected to offset the impact of continued demand-driven weakness. Assuming sustained gross margins in the Roofing business, Roofing performance will continue to more than offset weakness in the Insulation and Other businesses. Uncertainties that may impact Roofing gross margins include competitive pricing pressure and the cost and availability of raw materials, particularly asphalt. In the Insulation and Other businesses, Owens Corning is prepared to take further actions to reduce capacity and lower the businesses’ cost structure if further weakening occurs. Conversely, the company is prepared to respond to increased demand by bringing additional production capacity back on line.
Additional details, including a replay of a recent webcast discussing these results, is available at www.owenscorning.com/investors.