Profits narrow at Owens Corning

Owens Corning reported net sales of $1.39 billion for the second quarter of 2012, a 4.1% decrease from sales of $1.45 billion during the same period last year.

Net income for the second quarter, which ended June 30, was $39 million, compared with $78 million during the same period of 2011.

Net sales in insulation rose from $326 million in the second quarter of 2011 to $340 million in the second quarter of this year. Roofing revenue decreased however. Net sales in the second quarter 2012 were $605 million, compared with $645 million a year ago.

"Our second-quarter financial performance represents progress over the first quarter, but the rate of improvement is below our expectations, and we no longer see 2012 as a year of adjusted EBIT growth," said chairman and CEO Mike Thaman. "However, we continue to expect that the second half of the year will be more profitable than the first and that we will deliver strong free cash flow in 2012.

"Roofing profits remained strong, but compared negatively with the second quarter of last year due to continued high asphalt costs and competitive pressure in the marketplace," he added. "Insulation demonstrated excellent operating leverage and significantly narrowed its losses. In addition, our composites business made good progress in the repositioning of our European assets, the reduction of inventories and the start-up of the new melter in Mexico."

In the building materials segment, the company expects another year of strong financial performance in roofing, but with lower margins based on the current outlook for volumes, asphalt costs and pricing. The company continues to believe insulation will improve financial performance in the second half of the year and significantly narrow losses in 2012 on improved U.S. housing starts.