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.
Owens Corning (OC - Free Report) reported mixed results for third-quarter 2022. Quarterly earnings surpassed the Zacks Consensus Estimate, but net sales marginally missed the same. The metrics increased on a year-over-year basis on the back of strong pricing action.
Owens Corning's shares dropped 4.72% on Oct 26, after the earnings release.
Brian Chambers, OC’s chair and chief executive officer, stated, “The resilience of our global teams and disciplined execution of our enterprise strategy continue to drive our success and create value for our customers and our shareholders. We are well positioned to deliver on our financial commitments and invest in our businesses to strengthen our company for the future."
Inside the Headlines
The company reported adjusted earnings of $3.57 per share, which topped the consensus mark of $3.17 by 12.6% and increased 42% from $2.52 a year ago.
Owens Corning Inc Price, Consensus and EPS Surprise
Net sales of $2.53 billion lagged the consensus mark of $2.54 billion by 0.6% but increased 14% year over year. The uptick was mainly backed by solid segmental results.
Segment Details
Net sales in the Composites segment increased 8% year over year to $638 million. The upside was driven by higher selling prices and the favorable impact of the customer mix partially offset by lower volumes. Earnings before interest and taxes (EBIT) margin of 20% increased by 300 basis points (bps) from the year-ago quarter’s levels.
The Insulation segment’s net sales came in at $965 million, up 18% year over year on higher selling prices and the acquisition of Natural Polymers. EBIT increased to $173 million and the EBIT margin of 18% increased by 300 bps.
The Roofing segment’s net sales rose 15% year over year to $1 billion, driven by higher selling prices and partially offset by lower sales volume. EBIT increased to $229 million. EBIT margin contracted 100 bps year over year to 23%.
Operating Highlights
Adjusted EBIT and adjusted EBITDA rose 22% and 16% on a year-over-year basis, respectively. Adjusted EBIT margins rose 100 bps from the year-ago period’s levels and adjusted EBITDA remained flat.
Balance Sheet
As of Sep 30, 2022, the company had cash and cash equivalents of $751 million compared with $959 million at the 2021-end. Long-term debt — net of current portion — totaled $2.99 billion, up from $2.96 billion at 2021-end.
In the first three quarters, net cash provided by operating activities was $1,085 million compared with $1,168 million in the year-ago period. Free cash flow came in at $367 million for the third quarter, down from $400 million a year ago.
In the first nine months of 2022, the company returned $639 million to shareholders through dividends and share repurchases. In the third quarter, it paid dividends of $33 million and repurchased 2.5 million shares of common stock for $206 million. At quarter-end, 7.4 million shares were available under the current authorization.
Outlook
Owens Corning's businesses primarily depend on residential repair and remodeling activity, U.S. housing starts, global commercial construction activity and global industrial production.
For the fourth quarter, the company expects a moderate end market with the changing macroeconomic environment. For the fourth quarter, it expects net sales and adjusted EBIT to grow year over year.
For 2022, general corporate expenses are expected to be between $170 million and $180 million. Capital additions are estimated at $480 million, below the anticipated depreciation and amortization of $535 million (up from the previous expectation of $520 million). Interest expenses are estimated between $110 million and $115 million versus $115-$125 million expected earlier. The company now estimates an effective tax rate of 24-26% (25-27% expected earlier) and a cash tax rate of 22-24%, both on adjusted earnings.
PulteGroup Inc. (PHM - Free Report) reported unimpressive results in third-quarter 2022. Quarterly earnings and revenues missed their respective Zacks Consensus Estimate thanks to prevailing industry headwinds.
Nonetheless, PHM’s earnings and revenues increased on a year-over-year basis.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis.
However, OTIS’ sales declined from the year-ago quarter’s figure and lagged the consensus mark.
NVR, Inc. (NVR - Free Report) reported mixed results for third-quarter 2022. This homebuilding and mortgage banking company’s earnings missed the Zacks Consensus Estimate and revenues beat the same.
Shares of NVR increased 5.71% on Oct 26 as the top and the bottom line increased on a year-over-year basis.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Owens Corning (OC) Q3 Earnings Beat, Adjusted EBITDA Flat
Owens Corning (OC - Free Report) reported mixed results for third-quarter 2022. Quarterly earnings surpassed the Zacks Consensus Estimate, but net sales marginally missed the same. The metrics increased on a year-over-year basis on the back of strong pricing action.
Owens Corning's shares dropped 4.72% on Oct 26, after the earnings release.
Brian Chambers, OC’s chair and chief executive officer, stated, “The resilience of our global teams and disciplined execution of our enterprise strategy continue to drive our success and create value for our customers and our shareholders. We are well positioned to deliver on our financial commitments and invest in our businesses to strengthen our company for the future."
Inside the Headlines
The company reported adjusted earnings of $3.57 per share, which topped the consensus mark of $3.17 by 12.6% and increased 42% from $2.52 a year ago.
Owens Corning Inc Price, Consensus and EPS Surprise
Owens Corning Inc price-consensus-eps-surprise-chart | Owens Corning Inc Quote
Net sales of $2.53 billion lagged the consensus mark of $2.54 billion by 0.6% but increased 14% year over year. The uptick was mainly backed by solid segmental results.
Segment Details
Net sales in the Composites segment increased 8% year over year to $638 million. The upside was driven by higher selling prices and the favorable impact of the customer mix partially offset by lower volumes. Earnings before interest and taxes (EBIT) margin of 20% increased by 300 basis points (bps) from the year-ago quarter’s levels.
The Insulation segment’s net sales came in at $965 million, up 18% year over year on higher selling prices and the acquisition of Natural Polymers. EBIT increased to $173 million and the EBIT margin of 18% increased by 300 bps.
The Roofing segment’s net sales rose 15% year over year to $1 billion, driven by higher selling prices and partially offset by lower sales volume. EBIT increased to $229 million. EBIT margin contracted 100 bps year over year to 23%.
Operating Highlights
Adjusted EBIT and adjusted EBITDA rose 22% and 16% on a year-over-year basis, respectively. Adjusted EBIT margins rose 100 bps from the year-ago period’s levels and adjusted EBITDA remained flat.
Balance Sheet
As of Sep 30, 2022, the company had cash and cash equivalents of $751 million compared with $959 million at the 2021-end. Long-term debt — net of current portion — totaled $2.99 billion, up from $2.96 billion at 2021-end.
In the first three quarters, net cash provided by operating activities was $1,085 million compared with $1,168 million in the year-ago period. Free cash flow came in at $367 million for the third quarter, down from $400 million a year ago.
In the first nine months of 2022, the company returned $639 million to shareholders through dividends and share repurchases. In the third quarter, it paid dividends of $33 million and repurchased 2.5 million shares of common stock for $206 million. At quarter-end, 7.4 million shares were available under the current authorization.
Outlook
Owens Corning's businesses primarily depend on residential repair and remodeling activity, U.S. housing starts, global commercial construction activity and global industrial production.
For the fourth quarter, the company expects a moderate end market with the changing macroeconomic environment. For the fourth quarter, it expects net sales and adjusted EBIT to grow year over year.
For 2022, general corporate expenses are expected to be between $170 million and $180 million. Capital additions are estimated at $480 million, below the anticipated depreciation and amortization of $535 million (up from the previous expectation of $520 million). Interest expenses are estimated between $110 million and $115 million versus $115-$125 million expected earlier. The company now estimates an effective tax rate of 24-26% (25-27% expected earlier) and a cash tax rate of 22-24%, both on adjusted earnings.
Zacks Rank & Recent Construction Releases
Owens Corning currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. (PHM - Free Report) reported unimpressive results in third-quarter 2022. Quarterly earnings and revenues missed their respective Zacks Consensus Estimate thanks to prevailing industry headwinds.
Nonetheless, PHM’s earnings and revenues increased on a year-over-year basis.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis.
However, OTIS’ sales declined from the year-ago quarter’s figure and lagged the consensus mark.
NVR, Inc. (NVR - Free Report) reported mixed results for third-quarter 2022. This homebuilding and mortgage banking company’s earnings missed the Zacks Consensus Estimate and revenues beat the same.
Shares of NVR increased 5.71% on Oct 26 as the top and the bottom line increased on a year-over-year basis.