Mixed results for Owens Corning in fourth quarter
Owens Corning, a global manufacturer of residential and commercial building materials, has reported sales of $5.8 billion for fiscal 2008, a 17 percent increase over sales of $5.0 billion in 2007. The gains were credited to higher revenues from the company’s composites division, which included an acquisition in November 2007 and improved selling prices and sales volumes in roofing and asphalt.
The Toledo, Ohio-based company posted a net loss of $839 million in 2008, which it attributed primarily to a non-cash charge of $909 million recorded in 2008 to establish an accounting valuation allowance against deferred tax assets related to its net operating losses. In fiscal 2007, the company reported earnings of $96 million.
Excluding special items, adjusted earnings from continuing operations for the year were $124 million, versus $162 million a year ago.
Net sales for the fourth quarter of 2008 were $1.29 billion, down 1 percent from the corresponding quarter in 2007. Higher sales in the roofing and asphalt segment offset lower sales in composites and insulation, the company said. The latter business was impacted by the “global economic slowdown and the continued decline in U.S. new residential construction,” the company stated.
The company reported a net loss of $45 million for the quarter, compared to a loss of $46 million for the same quarter a year ago.
In its outlook, Owens Corning said it expected roofing and asphalt, which finished 2008 with strong margin rates, to perform well into 2009. The demand for asphalt continues to be fueled by highway construction funds and storm-related damage repairs.
But its insulation business faces “another difficult year in new residential construction …in the United States,” the company said. “Despite significant cost and capacity actions, it is likely this business will struggle to achieve profitability in 2009.”
Owens Corning stated that it will take “aggressive action” to manage its costs this year. “The company will further curtail capacity across its operations, reduce SG&A and head count, and delay capital projects such as the previously announced expansion in Russia,” it said.
