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Owens Corning (OC) Q1 Earnings & Net Sales Beat, Stock Down
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Owens Corning (OC - Free Report) reported impressive results in first-quarter 2024, with earnings and net sales surpassing the Zacks Consensus Estimate. Earnings increased on a year-over-year basis despite a net sales decline. Sales declined due to lower sales volumes in the Insulation and Composites segments.
Owens Corning's shares dropped 1.4% on Apr 24 after the earnings release.
Inside the Headlines
The company reported adjusted earnings per share (EPS) of $3.59, which topped the consensus mark of $3.04 by 18.1% and increased 28% from $2.80 a year ago.
Owens Corning Inc Price, Consensus and EPS Surprise
Net sales of $2.3 billion beat the consensus mark of $2.26 billion by 1.8% but fell 1% year over year from $2.33 billion.
Segment Details
Net sales in the Composites segment decreased 11% year over year to $523 million. This was due to lower volumes and price declines resulting from low spot prices in glass reinforcements. However, earnings before interest and taxes (EBIT) margin expanded to 9% from 8% in the year-ago period. EBITDA margins of 17% also increased from 16% reported a year ago. Favorable manufacturing costs and deflation for delivery and input costs partially offset the impact of production downtime and lower demand, which was due to lower prices.
The Insulation segment’s net sales were $904 million, down 2% year over year. Although demand was stable for the segment’s North American business, its European business was impacted by the weaker macro environment. The favorable mix and positive price offset lower volumes in Europe. EBIT margin rose 100 basis points (bps) year-over-year to 18%. EBITDA margin of 23% was flat from the year-ago period.
The Roofing segment’s net sales rose 7% year over year to $957 million, driven by strong demand for premium laminate shingles and attachment of components products, as well as favorable mix and carryover price. However, this was offset mainly by volume impact from the segment’s exit of protective packaging. EBIT and EBITDA margins expanded 700 bps and 600 bps to 30% and 31%, respectively. The EBIT improvement was mainly backed by positive prices, favorable manufacturing costs and mix.
Operating Highlights
Adjusted EBIT and adjusted EBITDA improved 21% and 16%, respectively, on a year-over-year basis. Adjusted EBIT and adjusted EBITDA margin expanded 400 bps each from the year-ago figure.
Balance Sheet
As of Mar 31, 2024, the company had cash and cash equivalents of $1.25 billion compared with $1.62 billion at 2023-end. Long-term debt — net of the current portion — totaled $2.65 billion, down from $2.62 billion at 2023-end.
In the first three months of 2024, net cash provided by operating activities was $24 million against net cash used in operating activities of $164 million in the previous year. Free cash flow came in at a negative $128 million in the reported period compared with $322 million a year ago.
In the first quarter, the company returned $182 million to shareholders through dividends and share repurchases. It paid a total quarterly cash dividend of $52 million and repurchased 0.9 million shares of common stock for $130 million.
Q2 Outlook
Owens Corning's businesses primarily depend on residential repair and remodeling activity, U.S. housing starts, global commercial construction activity and industrial production. The company expects its North American building and construction markets to stay favorable, with strong demand for its products in the near term. Macro trends and geopolitical tensions outside North America are causing slow global economic growth.
For the second quarter of 2024, the company expects net sales to be in line with the second quarter of 2023 while generating approximately 20% EBIT margins.
2024 Outlook
For 2024, the company expects general corporate expenses between $240 million and $250 million. Interest expenses are estimated to be between $70 million and $80 million.
Capital additions, as well as depreciation and amortization, are estimated at an approximate value of $550 million. The company projects an effective tax rate of 24-26% on adjusted earnings.
NVR, Inc. (NVR - Free Report) reported impressive first-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was backed by improved demand trends, which resulted in higher order volumes.
Masco Corporation (MAS - Free Report) reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate, but net sales lagged the same. On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings. Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, with earnings and revenues surpassing the Zacks Consensus Estimates. Also, metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.
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Owens Corning (OC) Q1 Earnings & Net Sales Beat, Stock Down
Owens Corning (OC - Free Report) reported impressive results in first-quarter 2024, with earnings and net sales surpassing the Zacks Consensus Estimate. Earnings increased on a year-over-year basis despite a net sales decline. Sales declined due to lower sales volumes in the Insulation and Composites segments.
Owens Corning's shares dropped 1.4% on Apr 24 after the earnings release.
Inside the Headlines
The company reported adjusted earnings per share (EPS) of $3.59, which topped the consensus mark of $3.04 by 18.1% and increased 28% from $2.80 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 $2.3 billion beat the consensus mark of $2.26 billion by 1.8% but fell 1% year over year from $2.33 billion.
Segment Details
Net sales in the Composites segment decreased 11% year over year to $523 million. This was due to lower volumes and price declines resulting from low spot prices in glass reinforcements. However, earnings before interest and taxes (EBIT) margin expanded to 9% from 8% in the year-ago period. EBITDA margins of 17% also increased from 16% reported a year ago. Favorable manufacturing costs and deflation for delivery and input costs partially offset the impact of production downtime and lower demand, which was due to lower prices.
The Insulation segment’s net sales were $904 million, down 2% year over year. Although demand was stable for the segment’s North American business, its European business was impacted by the weaker macro environment. The favorable mix and positive price offset lower volumes in Europe. EBIT margin rose 100 basis points (bps) year-over-year to 18%. EBITDA margin of 23% was flat from the year-ago period.
The Roofing segment’s net sales rose 7% year over year to $957 million, driven by strong demand for premium laminate shingles and attachment of components products, as well as favorable mix and carryover price. However, this was offset mainly by volume impact from the segment’s exit of protective packaging. EBIT and EBITDA margins expanded 700 bps and 600 bps to 30% and 31%, respectively. The EBIT improvement was mainly backed by positive prices, favorable manufacturing costs and mix.
Operating Highlights
Adjusted EBIT and adjusted EBITDA improved 21% and 16%, respectively, on a year-over-year basis. Adjusted EBIT and adjusted EBITDA margin expanded 400 bps each from the year-ago figure.
Balance Sheet
As of Mar 31, 2024, the company had cash and cash equivalents of $1.25 billion compared with $1.62 billion at 2023-end. Long-term debt — net of the current portion — totaled $2.65 billion, down from $2.62 billion at 2023-end.
In the first three months of 2024, net cash provided by operating activities was $24 million against net cash used in operating activities of $164 million in the previous year. Free cash flow came in at a negative $128 million in the reported period compared with $322 million a year ago.
In the first quarter, the company returned $182 million to shareholders through dividends and share repurchases. It paid a total quarterly cash dividend of $52 million and repurchased 0.9 million shares of common stock for $130 million.
Q2 Outlook
Owens Corning's businesses primarily depend on residential repair and remodeling activity, U.S. housing starts, global commercial construction activity and industrial production. The company expects its North American building and construction markets to stay favorable, with strong demand for its products in the near term. Macro trends and geopolitical tensions outside North America are causing slow global economic growth.
For the second quarter of 2024, the company expects net sales to be in line with the second quarter of 2023 while generating approximately 20% EBIT margins.
2024 Outlook
For 2024, the company expects general corporate expenses between $240 million and $250 million. Interest expenses are estimated to be between $70 million and $80 million.
Capital additions, as well as depreciation and amortization, are estimated at an approximate value of $550 million. The company projects an effective tax rate of 24-26% on adjusted earnings.
Zacks Rank & Recent Construction Releases
Owens Corning currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVR, Inc. (NVR - Free Report) reported impressive first-quarter 2024 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was backed by improved demand trends, which resulted in higher order volumes.
Masco Corporation (MAS - Free Report) reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate, but net sales lagged the same. On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings. Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, with earnings and revenues surpassing the Zacks Consensus Estimates. Also, metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.