- THE MAGAZINE
Owens Corning’s 2009 adjusted earnings were $145 million, or $1.14 per adjusted diluted share, compared with $152 million, or $1.17 per adjusted diluted share in 2008. Adjusted earnings in the fourth quarter of 2009 were $1 million, or $0.01 per adjusted diluted share, compared with $24 million, or $0.19 per adjusted diluted share, in the fourth quarter of 2008. Owens Corning's 2009 net earnings were $64 million, or $0.50 per diluted share, compared with a net loss of $813 million, or $6.38 per diluted share. The net loss in the fourth quarter of 2009 was $21 million, or $0.17 per diluted share, compared with a net loss of $34 million, or $0.27 per diluted share in 2008.
“I’m pleased with what we accomplished in 2009 in the face of weakness in the U.S. housing market and the global economy,” said Mike Thaman, chairman and CEO. “Our Roofing business achieved record results. The actions we took in our Composites segment returned the business to profitability in the second half of the year. We generated significant cash flow during the year through reductions in working capital and capital expenditures. We finished the year with a strong balance sheet.
“Composites performance will show improvement as we see further strengthening in global demand. We will demonstrate operating leverage in Composites as we increase capacity utilization. Our Roofing business will produce another strong year. The Insulation business is expected to narrow its losses despite continuing to face a weak market.”
Owens Corning expects that its 2010 adjusted earnings per share (EPS) will grow by 25% or more. Supported by a strong balance sheet and a favorable tax position, this level of earnings would translate to adjusted EBIT of $350 million or more for 2010.
In the Composites segment, the company believes that overall demand will continue to trend upward as global industrial activity improves. The rate of market recovery remains uncertain. Production levels in 2010 will be increased to meet demand, which will result in the company increasing capacity utilization. In addition, this segment will continue to benefit from synergies associated with the 2007 acquisition and cost-reduction actions taken in 2008 and 2009.
The company’s Roofing business has achieved significant margin improvements through effective price discipline and gains in manufacturing and material efficiencies. Owens Corning expects that these margin improvements will continue to drive profitability despite weak demand. Uncertainties that could affect Roofing gross margins include competitive pricing pressure and the cost and availability of raw materials, mainly asphalt.
Owens Corning believes that its Insulation business will benefit from the geographic, product and channel mix of the company’s product portfolio, which will help moderate the impact of continued demand-driven weakness associated with new construction in the U.S. The company believes demand for insulation lags U.S. residential housing starts by approximately three months. Fourth quarter 2009 U.S. housing starts were 19% lower than in the fourth quarter of 2008. Therefore, it’s expected that new residential construction-related market demand in the Insulation business will be weaker in the first quarter of 2010 than it was in the first quarter of 2009.
Additional details are available at www.owenscorning.com.