Owens Corning (OC) Tops Q1 EPS by 19c

Owens Corning (NYSE: OC) reported Q1 EPS of $0.53, $0.19 better than the analyst estimate of $0.34. Revenue for the quarter came in at $1.23 billion versus the consensus estimate of $1.24 billion.

Outlook

The company continues to expect a market environment consistent with consensus expectations for U.S. housing starts and moderate global growth.

In Composites, the company expects continued growth in the glass fiber market, driven by moderate global industrial production growth. Based on the strong start to the year, Owens Corning now expects EBIT improvement of at least $30 million.

In Roofing, given the strong start to the year and recent storm activity, the company now sees upside to its prior guidance of modest market growth in 2016.

In Insulation, the company now expects slightly negative revenue growth and relatively flat margins for the full year. This outlook reflects the potential impact of a contractual dispute with a large residential customer that began early in the second quarter of 2016.

The updated outlook for Roofing and Composites performance should offset the lower expectations for the Insulation business. In addition, the company expects the InterWrap acquisition to contribute at least $160 million of revenue and $25 million of adjusted EBIT to the Roofing segment in 2016.

The company estimates an effective tax rate of 32 percent to 34 percent, and a cash tax rate of 10 percent to 12 percent on adjusted pre-tax earnings, due to the company’s $2.0 billion U.S. tax net operating loss carryforward.

The company expects general corporate expenses to be $120 million to $130 million in 2016. Capital additions in 2016 are expected to total approximately $385 million, including an estimated $50 million for the completion of the previously announced mineral fiber insulation facility in Joplin, Missouri. Interest expense is now expected to be about $115 million, including the financing of the InterWrap acquisition.

For earnings history and earnings-related data on Owens Corning (OC) click here.

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