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Owens Corning (OC) to Post Q1 Earnings: What's in the Cards?
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Owens Corning (OC - Free Report) is slated to report first-quarter 2021 results on Apr 28, before the opening bell.
In the last reported quarter, its earnings and sales topped the Zacks Consensus Estimate by 36.7% and 6.6%, respectively. Also, earnings and sales grew 68.1% and 14%, respectively, on a year-over-year basis.
The company topped earnings estimates in the trailing four quarters, with the average being 77.8%.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported has moved 1.4% downward to $1.42 per share over the past 30 days. The said figure indicates a 136.7% increase from the year-ago earnings of 60 cents per share. The consensus mark for revenues is $1.81 billion, suggesting a 13.3% year-over-year improvement.
Owens Corning’s first-quarter revenues are expected to have benefited from strong contribution from the Roofing segment, backed by carryover demand from 2020. During fourth-quarter 2020 earnings call, the company projected volumes to be up 25% for the first quarter.
In the Insulation business, it is expected to have regained market share in the quarter backed by persistent strength in new U.S. residential construction. Particularly, North American residential volumes are expected to be in line with the market for the to-be-reported quarter. The company has been witnessing favorable pricing based on positive January traction despite inflationary pressure in the business regarding transportation costs and price increase in April.
Technical and other building insulation businesses have been experiencing gradual recovery in commercial and industrial end markets across the globe.
In Composites, the company expects volumes to increase in mid-single digits year over year for quarter to be reported. It has been seeing strength in a few key regions and downstream applications that support the wind and building and construction markets.
Lastly in Roofing, the company witnessed substantially higher January shingle shipments. Owing to this, it expects 25% higher market volumes for the first quarter.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $690 million, indicating a year-over-year rise of 24.3%. Meanwhile, the same for the company’s Insulation segment revenues is $639 million, suggesting 6% increase from the year-ago figure. Moreover, the consensus mark for the Composites segment revenues is pegged at $521 million, implying a 3.6% year-over-year growth. However, the company’s top line might have been affected by asphalt inflation.
Overall, strategic acquisitions, impressive pricing momentum, strong organic growth, operating efficiencies and solid segmental prospects are expected to have positively impacted Owens Corning’s first-quarter performance. Also, solid commercial execution, strong manufacturing gains and disciplined cost control are likely to be reflected on its results. However, increased raw material and transportation costs are expected to have hampered the bottom line to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Owens Corning this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +11.75% and sports a Zacks Rank #1.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +1.56% and sports a Zacks Rank #1.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +8.47% and a Zacks Rank #3.
Zacks Top 10 Stocks for 2021
1In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021? Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as
+386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Owens Corning (OC) to Post Q1 Earnings: What's in the Cards?
Owens Corning (OC - Free Report) is slated to report first-quarter 2021 results on Apr 28, before the opening bell.
In the last reported quarter, its earnings and sales topped the Zacks Consensus Estimate by 36.7% and 6.6%, respectively. Also, earnings and sales grew 68.1% and 14%, respectively, on a year-over-year basis.
The company topped earnings estimates in the trailing four quarters, with the average being 77.8%.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported has moved 1.4% downward to $1.42 per share over the past 30 days. The said figure indicates a 136.7% increase from the year-ago earnings of 60 cents per share. The consensus mark for revenues is $1.81 billion, suggesting a 13.3% year-over-year improvement.
Owens Corning Inc Price and EPS Surprise
Owens Corning Inc price-eps-surprise | Owens Corning Inc Quote
Factors to Note
Owens Corning’s first-quarter revenues are expected to have benefited from strong contribution from the Roofing segment, backed by carryover demand from 2020. During fourth-quarter 2020 earnings call, the company projected volumes to be up 25% for the first quarter.
In the Insulation business, it is expected to have regained market share in the quarter backed by persistent strength in new U.S. residential construction. Particularly, North American residential volumes are expected to be in line with the market for the to-be-reported quarter. The company has been witnessing favorable pricing based on positive January traction despite inflationary pressure in the business regarding transportation costs and price increase in April.
Technical and other building insulation businesses have been experiencing gradual recovery in commercial and industrial end markets across the globe.
In Composites, the company expects volumes to increase in mid-single digits year over year for quarter to be reported. It has been seeing strength in a few key regions and downstream applications that support the wind and building and construction markets.
Lastly in Roofing, the company witnessed substantially higher January shingle shipments. Owing to this, it expects 25% higher market volumes for the first quarter.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $690 million, indicating a year-over-year rise of 24.3%. Meanwhile, the same for the company’s Insulation segment revenues is $639 million, suggesting 6% increase from the year-ago figure. Moreover, the consensus mark for the Composites segment revenues is pegged at $521 million, implying a 3.6% year-over-year growth. However, the company’s top line might have been affected by asphalt inflation.
Overall, strategic acquisitions, impressive pricing momentum, strong organic growth, operating efficiencies and solid segmental prospects are expected to have positively impacted Owens Corning’s first-quarter performance. Also, solid commercial execution, strong manufacturing gains and disciplined cost control are likely to be reflected on its results. However, increased raw material and transportation costs are expected to have hampered the bottom line to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Owens Corning this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, it has a Zacks Rank #2 and an Earnings ESP of -7.53%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Worth a Look
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +11.75% and sports a Zacks Rank #1.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +1.56% and sports a Zacks Rank #1.
Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +8.47% and a Zacks Rank #3.
Zacks Top 10 Stocks for 2021
1In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021? Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as
+386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>