We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, the company’s earnings and sales beat the Zacks Consensus Estimate by 0.4% and 2.8% and increased 48.2% and 15.8% on a year-over-year basis, respectively. Markedly, OC beat earnings expectations in the last four quarters, with the average being 20.7%.
The upside was driven by a robust U.S. residential housing market and stronger commercial and industrial markets.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings per share has been unchanged at $1.90 over the past 60 days for the quarter to be reported. The estimated figure indicates no change from the year-ago figure. The consensus mark for revenues is pegged at $2.01 billion, suggesting 4.6% growth from the year-ago reported figure of $1.93 billion.
Escalated demand for residential repair and remodeling activity, U.S. housing starts, global industrial production and a consistent commercial market are expected to have aided OC’s fourth-quarter 2021 performance. This apart, operational efficiency also served as a tailwind.
For the fourth quarter, Owens Corning’s insulation business (accounting for 37% of total revenues) is expected to have witnessed solid growth due to strong demand for insulating products. For the North American residential fiberglass insulation business, the company expects volume to be up in mid-high single digits. Price realization is expected to be similar to the third quarter. In the technical and global insulation businesses, volumes are expected to rise in low- to mid-single digits, with increasing demand for its products in global building and construction applications. The company anticipates material and energy costs to increase more than the third quarter and price realization to result in a positive price-cost mix in the fourth quarter. EBIT margins are expected to be 15%.
The Zacks Consensus Estimate for the company’s Insulation segment revenues is $840 million, suggesting a 15.4% increase from the year-ago figure.
For Composite business (accounting for 27.8% of total revenues), OC anticipates volumes to fall in mid-single digits from the prior year, while revenues are likely to grow on improvement in sales mix and continued price realization. Composites price is expected to rise in mid-single digits from the prior-year level. The business is likely to benefit from $30 million of curtailment reversals. Cost-curtailment benefits of $15-$20 million may help it offset input material and transportation inflation. EBIT margins are projected at 14%.
The Zacks Consensus Estimate for Composite segment revenues is pegged at $567 million, indicating a rise from $547 million a year ago.
For Roofing (accounting for 38.2% of total revenues), the company expects both the market and volumes to be down in mid-teens from the prior year due to the expectation of a more normal winter season, lower storm demand and ongoing supply chain disruptions. Pricing is likely to be favorable, while realization is expected to be below the third-quarter level. Roofing EBIT margin is likely to be 20% on lower volumes and narrowed but positive price cost mix.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $649 million, indicating a year-over-year decline of 7.5%.
Yet, OC is facing continuous supply-chain disruptions and some inflationary headwinds with respect to transportation, material, and energy costs. These factors are likely to have hampered Owens Corning’s bottom line in fourth-quarter 2021.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Owens Corning this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: Earnings ESP for Owens Corning is 0.00%. 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 for the quarter to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #2.
Shares of Boise Cascade have gained 53% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2.
Shares of Louisiana-Pacific have gained 56.3% over the past year. LPX’s earnings topped the consensus mark in all the last four quarters, with the average being 10.5%.
Floor & Decor Holdings, Inc. (FND - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
Shares of Floor & Decor have gained 2.8% over the past year. FND’s earnings topped the consensus mark in all the last four quarters, with the average being 14.5%.
Image: Bigstock
What to Expect From Owens Corning (OC) This Earnings Season
Owens Corning (OC - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 16, before market open.
In the last reported quarter, the company’s earnings and sales beat the Zacks Consensus Estimate by 0.4% and 2.8% and increased 48.2% and 15.8% on a year-over-year basis, respectively. Markedly, OC beat earnings expectations in the last four quarters, with the average being 20.7%.
The upside was driven by a robust U.S. residential housing market and stronger commercial and industrial markets.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings per share has been unchanged at $1.90 over the past 60 days for the quarter to be reported. The estimated figure indicates no change from the year-ago figure. The consensus mark for revenues is pegged at $2.01 billion, suggesting 4.6% growth from the year-ago reported figure of $1.93 billion.
Owens Corning Inc Price and EPS Surprise
Owens Corning Inc price-eps-surprise | Owens Corning Inc Quote
Factors to Consider
Escalated demand for residential repair and remodeling activity, U.S. housing starts, global industrial production and a consistent commercial market are expected to have aided OC’s fourth-quarter 2021 performance. This apart, operational efficiency also served as a tailwind.
For the fourth quarter, Owens Corning’s insulation business (accounting for 37% of total revenues) is expected to have witnessed solid growth due to strong demand for insulating products. For the North American residential fiberglass insulation business, the company expects volume to be up in mid-high single digits. Price realization is expected to be similar to the third quarter. In the technical and global insulation businesses, volumes are expected to rise in low- to mid-single digits, with increasing demand for its products in global building and construction applications. The company anticipates material and energy costs to increase more than the third quarter and price realization to result in a positive price-cost mix in the fourth quarter. EBIT margins are expected to be 15%.
The Zacks Consensus Estimate for the company’s Insulation segment revenues is $840 million, suggesting a 15.4% increase from the year-ago figure.
For Composite business (accounting for 27.8% of total revenues), OC anticipates volumes to fall in mid-single digits from the prior year, while revenues are likely to grow on improvement in sales mix and continued price realization. Composites price is expected to rise in mid-single digits from the prior-year level. The business is likely to benefit from $30 million of curtailment reversals. Cost-curtailment benefits of $15-$20 million may help it offset input material and transportation inflation. EBIT margins are projected at 14%.
The Zacks Consensus Estimate for Composite segment revenues is pegged at $567 million, indicating a rise from $547 million a year ago.
For Roofing (accounting for 38.2% of total revenues), the company expects both the market and volumes to be down in mid-teens from the prior year due to the expectation of a more normal winter season, lower storm demand and ongoing supply chain disruptions. Pricing is likely to be favorable, while realization is expected to be below the third-quarter level. Roofing EBIT margin is likely to be 20% on lower volumes and narrowed but positive price cost mix.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $649 million, indicating a year-over-year decline of 7.5%.
Yet, OC is facing continuous supply-chain disruptions and some inflationary headwinds with respect to transportation, material, and energy costs. These factors are likely to have hampered Owens Corning’s bottom line in fourth-quarter 2021.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Owens Corning this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: Earnings ESP for Owens Corning is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
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 for the quarter to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #2.
Shares of Boise Cascade have gained 53% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2.
Shares of Louisiana-Pacific have gained 56.3% over the past year. LPX’s earnings topped the consensus mark in all the last four quarters, with the average being 10.5%.
Floor & Decor Holdings, Inc. (FND - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
Shares of Floor & Decor have gained 2.8% over the past year. FND’s earnings topped the consensus mark in all the last four quarters, with the average being 14.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.