Owens Corning’s profit was up 26 percent in the year’s second quarter, even as the company’s total sales were down.
OC said Wednesday it turned a profit of $49 million, or 41 cents per share, in the quarter. That is up from $39 million, or 32 cents per share, in last year’s second quarter. Sales fell to $1.35 billion from $1.39 billion in 2012, but OC more than made up the difference on lower costs and higher prices, particularly in its insulation business.
The company, headquartered in downtown Toledo, makes building materials, including insulation and roofing products, as well as various composite materials.
Overall sales in the business materials segment fell 2 percent, dragged down primarily by roofing, which fell 16 percent.
However, sales of insulation surged 22 percent to $415 million. This was the first time since 2008 that insulation has been profitable in the second quarter, OC said.
OC’s insulation business struggled as the housing market slumped. Chief Executive Officer Mike Thaman said Wednesday that even with recent price increases, insulation remains priced about 25 percent below its pre-recession peak.
“We have a lot of work to do to get pricing up and get back to an investment-grade business with good margins," he said on a conference call with investors. “We’ll soon get to the point where we’re no longer losing money at the manufacturing level.”
The company expects insulation will return to full-year profitability this year.
OC anticipates market demand to be flat for building materials but does expect higher volumes in 2013’s second half. Mr. Thaman said OC is entering the second half with confidence, though the rate of the housing recovery will largely determine OC’s upside.
Though officials said they were pleased with the company’s progress in the year's second quarter, OC’s earnings didn't meet analysts’ estimates.
On an adjusted basis that excludes one-time charges, OC earned 57 cents per share, up from 55 cents per share last year. Analysts were expecting earnings of 69 cents per share. Shares of the company’s stock closed down a little more than 1 percent at $39.35.
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