Owens Corning's Quarterly Profit Hurt by a fall in Composites Revenue

august 6 2012

Owens Corning has reported consolidated net sales of $1.39 billion in the second quarter of 2012, compared with $1.45 billion during the same period last year.

Second-quarter 2012 adjusted earnings, based on the company's expected full-year effective tax rate of 25 percent, were $66 million, or $0.54 per diluted share, compared with $85 million, or $0.68 per diluted share, during the same period last year. The company reported net earnings of $39 million, or $0.32 per diluted share, compared with net earnings of $78 million, or $0.62 per diluted share, in the second quarter of 2011.

"Our second-quarter financial performance represents progress over the first quarter, but the rate of improvement is below our expectations, and we no longer see 2012 as a year of adjusted EBIT growth," said Chairman and Chief Executive Officer Mike Thaman. "However, we continue to expect that the second half of the year will be more profitable than the first and that we will deliver strong free cash flow in 2012.

"Roofing profits remained strong, but compared negatively with the second quarter of last year due to continued high asphalt costs and competitive pressure in the marketplace," he added. "Insulation demonstrated excellent operating leverage and significantly narrowed its losses. In addition, our Composites business made good progress in the repositioning of our European assets, the reduction of inventories and the start-up of the new melter in Mexico."

Consolidated Second-Quarter 2012 Results

Owens Corning's primary safety metric year-to-date was approximately 13 percent higher at June 30, 2012, in comparison to the company's full-year 2011 performance.

Second-quarter adjusted earnings before interest and taxes (EBIT) were $117 million in 2012, compared with EBIT of $135 million in the second quarter of 2011. In the second quarter of 2012, the company had certain items that were not the result of current operations. Before adjusting for these items, Owens Corning's second-quarter 2012 EBIT was $85 million. (See Table 2 for a reconciliation of these items.)

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