Owens Corning Reports Consolidated Net Sales of $1.7 Billion in First-Quarter 2018

April 30 2018

Owens Corning reported consolidated net sales of $1.7 billion in first-quarter 2018, compared with net sales of $1.5 billion in first-quarter 2017, an increase of 14%.

First-quarter 2018 net earnings attributable to Owens Corning were $92 million, or $0.82 per diluted share, compared with $101 million, or $0.89 per diluted share, during the comparable quarter in 2017. First-quarter 2018 adjusted earnings were $90 million, or $0.80 per diluted share, compared with $97 million, or $0.85 per diluted share, during the same period one year ago.

Consolidated First-Quarter 2018 Results
• Owens Corning sustained a high level of safety performance in first-quarter 2018, with a recordable incident rate of 0.46, compared with 0.49 in first-quarter 2017, representing a 6% reduction.
• Reported earnings before interest and taxes (EBIT) for first-quarter 2018 were $131 million, compared with $170 million during the same period in 2017. Adjusted EBIT in first-quarter 2018 was $152 million, down from $171 million in 2017 (See Table 2).
• During first-quarter 2018, Owens Corning repurchased 1.0 million shares of its common stock for $83 million. As of the end of the quarter, 6.5 million shares were available for repurchase under the current authorization.

2018 Outlook
• The company expects an environment consistent with consensus expectations for U.S. housing starts and global industrial production growth.
• In Roofing, the company expects growth in both the new construction and remodeling markets. Storm demand at historical averages would result in a mid-single digit decline of the overall asphalt shingle market. The components business is expected to grow at a double-digit rate. The company continues to expect to achieve sufficient pricing in the year to overcome the impact of asphalt and transportation cost inflation.
• In Composites, the company expects continued growth in the glass fiber market, driven by global industrial production growth. Despite higher than anticipated inflation in the first quarter, the company continues to target an EBIT improvement of about $20 million, with the benefit of market growth and improved pricing partly offset by accelerated inflation and higher rebuild costs.
• In Insulation, the company continues to expect to deliver EBIT growth of $150 million. First-quarter price realization is ahead of the previously disclosed expectation, but the additional progress is anticipated to be offset by transportation inflation in 2018. The current EBIT outlook does not include the potential benefit of future price activity, primarily in the U.S. residential new construction business.
• The company estimates an effective tax rate of 26 percent to 28 percent. The company also continues to expect a cash tax rate of 10 percent to 12 percent on adjusted pre-tax earnings, due to the company’s U.S. tax net operating loss and foreign tax credit carryforwards.
• The company expects general corporate expenses to be between $140 million and $150 million in 2018. Capital additions in 2018 are expected to total approximately $500 million. Interest expense is expected to be between $125 million and $130 million.
• For full-year 2018, the company expects to convert adjusted earnings into free cash flow at about 100%.

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