USG gets a 2.7% sales bump in Q1

USG Corporation reported a moderate sales increase and a decline in net income for the first quarter, but it pointed to strong operational performance and demand.

“We had sound operational performance in the first quarter and we are seeing solid demand for our products,” said Jennifer F. Scanlon, President and CEO. “I am encouraged about our prospects for the balance of the year, despite the uptick we are seeing in commodity costs.”

Net sales were $767 million for the quarter, up 2.7% from the year-ago period's $747 million.

However, operating profit decreased to $91 million from $116 million, while adjusted operating profit decreased to $104 million from $120 million in the first quarter of 2017 compared to the first quarter of 2016.

Net income was $55 million, down 17.9% from $67 million in the first quarter of 2016.

Segment-wise, Gypsum's operating profit was down $15 million to $91 million, and Ceilings was down from $28 million to $23 million.

However, the USG Boral business generated $13 million of equity income in the first quarter of 2017, an increase of $6 million from the first quarter of 2016, on a 16% increase in plasterboard volumes as well as improved plasterboard price and increased sales of adjacent products.

“Our residential and commercial construction end markets are healthy and growing,” Ms. Scanlon said. “With innovative new product offerings, such as the Sheetrock Brand EcoSmart Panels that we announced in March, we are well positioned for success in 2017.”