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In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 15.4% and increased 43% year over year. Net sales increased 16% year over year and topped the consensus mark by 0.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Owens Corning’s third-quarter earnings is pegged at $3.18 per share, suggesting growth of 26.2% from the year-ago quarter’s figure of $2.52. Earnings estimates for the said period moved up 0.3% in the past seven days, depicting analysts’ optimism over the company’s growth potential. The consensus estimate for net sales is pegged at $2.55 billion, indicating a 15.2% increase from the prior-year quarter’s figure.
Factors to Note
Owens Corning’s third-quarter earnings and net sales are likely to have benefited from strong demand across the markets served, structural improvements and strategic investments and solid commercial and operational execution.
Strong demand for insulating products, primarily driven by commercial and industrial construction activity, is likely to have added growth to the top line. both North American residential, and technical and global insulation businesses are witnessing higher selling prices and moderate volumes. For the third quarter, the company expects mid- to high teen revenue growth. In the North American residential fiberglass business, volumes are likely to be up slightly, backed by the start-up of the Eloy facility and ongoing productivity efforts. The technical and global insulation business volumes are likely to be flat from the prior year’s levels. Price realization for both markets is expected to be similar to Q2. Also, EBIT margins is expected to grow in the mid-teens.
The Zacks Consensus Estimate for the company’s Insulation segment revenues is $941 million, suggesting a 15.5% increase from the year-ago figure.
For Composite business, OC expects revenues to increase in the low double digits, primarily driven by continued price realization. It also anticipates composites pricing to remain steady. Nonetheless, it expects to realize strong earnings growth in the quarter-to-be-reported with high-teen EBIT margins.
The Zacks Consensus Estimate for Composite segment revenues is pegged at $669 million, indicating a rise of 13.2% from $591 million a year ago.
For Roofing, the company anticipates revenues to increase in the high teens, driven by solid repair and remodel demand and ongoing regional inventory replenishment opportunities. Shingle volumes is expected to be in line with the market. It expect inflation to remain a meaningful headwind in the quarter with asphalt and transportation costs continuing to increase. Yet, it anticipate earnings growth in the third quarter with EBIT margins in the low 20s.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $1,005 million, indicating year-over-year growth of 15.7%.
What the Zacks Model Unveils
Our proven model predicts 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies in the Zacks Construction sector, according to our model, who have the right combination of elements to post an earnings beat in their respective quarters to be reported.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank #3.
PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.6%. Earnings for the to-be-reported quarter are expected to increase 51.1% year over year.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #1.
BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 27.1%. Earnings for the to-be-reported quarter are expected to increase 92.6% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 11.5%. Earnings for the to-be-reported quarter are expected to decline 1.6% year over year.
Image: Bigstock
Factors Setting The Tone for Owens Corning's (OC) Q3 Earnings
Owens Corning (OC - Free Report) is scheduled to report third-quarter 2022 results on Oct 26, before the opening bell.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 15.4% and increased 43% year over year. Net sales increased 16% year over year and topped the consensus mark by 0.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Owens Corning’s third-quarter earnings is pegged at $3.18 per share, suggesting growth of 26.2% from the year-ago quarter’s figure of $2.52. Earnings estimates for the said period moved up 0.3% in the past seven days, depicting analysts’ optimism over the company’s growth potential. The consensus estimate for net sales is pegged at $2.55 billion, indicating a 15.2% increase from the prior-year quarter’s figure.
Factors to Note
Owens Corning’s third-quarter earnings and net sales are likely to have benefited from strong demand across the markets served, structural improvements and strategic investments and solid commercial and operational execution.
Owens Corning Inc Price and EPS Surprise
Owens Corning Inc price-eps-surprise | Owens Corning Inc Quote
Strong demand for insulating products, primarily driven by commercial and industrial construction activity, is likely to have added growth to the top line. both North American residential, and technical and global insulation businesses are witnessing higher selling prices and moderate volumes. For the third quarter, the company expects mid- to high teen revenue growth. In the North American residential fiberglass business, volumes are likely to be up slightly, backed by the start-up of the Eloy facility and ongoing productivity efforts. The technical and global insulation business volumes are likely to be flat from the prior year’s levels. Price realization for both markets is expected to be similar to Q2. Also, EBIT margins is expected to grow in the mid-teens.
The Zacks Consensus Estimate for the company’s Insulation segment revenues is $941 million, suggesting a 15.5% increase from the year-ago figure.
For Composite business, OC expects revenues to increase in the low double digits, primarily driven by continued price realization. It also anticipates composites pricing to remain steady. Nonetheless, it expects to realize strong earnings growth in the quarter-to-be-reported with high-teen EBIT margins.
The Zacks Consensus Estimate for Composite segment revenues is pegged at $669 million, indicating a rise of 13.2% from $591 million a year ago.
For Roofing, the company anticipates revenues to increase in the high teens, driven by solid repair and remodel demand and ongoing regional inventory replenishment opportunities. Shingle volumes is expected to be in line with the market. It expect inflation to remain a meaningful headwind in the quarter with asphalt and transportation costs continuing to increase. Yet, it anticipate earnings growth in the third quarter with EBIT margins in the low 20s.
The Zacks Consensus Estimate for Roofing segment revenues is pegged at $1,005 million, indicating year-over-year growth of 15.7%.
What the Zacks Model Unveils
Our proven model predicts 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, OC has a Zacks Rank #2 and an Earnings ESP of +4.09%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, according to our model, who have the right combination of elements to post an earnings beat in their respective quarters to be reported.
PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank #3.
PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.6%. Earnings for the to-be-reported quarter are expected to increase 51.1% year over year.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank #1.
BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 27.1%. Earnings for the to-be-reported quarter are expected to increase 92.6% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +0.80% and a Zacks Rank #3.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 11.5%. Earnings for the to-be-reported quarter are expected to decline 1.6% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.