USG points to growth in operating profit
While operating profit increased in the second quarter for USG Corp., the building products giant reported a decline in first-quarter net income.
The company’s net income was a reported $74 million, down from $79 million in the same quarter last year. On a consolidated basis in the second quarter of 2016, net sales were $1 billion, compared to $970 million in the second quarter of 2015. Foreign currency unfavorably impacted net sales by $10 million in the second quarter of 2016.
“Delivering margin expansion in all of our businesses in the second quarter is a clear indication that our strategy is working,” CEO James Metcalf said. “With a continued focus on keeping our break even low, I believe USG is well positioned to take advantage of our improving end markets.”
Operating profit increased to $133 million from $105 million, while adjusted operating profit increased to $138 million from $118 million in the second quarter of 2016 compared to the second quarter of 2015.
USG generated $74 million in net income and $0.50 per diluted share in the second quarter of 2016, compared to $79 million and $0.54 per diluted share in the second quarter of 2015. On an adjusted basis, net income of $68 million and diluted earnings per share of $0.46 in the second quarter of 2016 decreased from $78 million and $0.53, respectively, in the second quarter of 2015. Net income and adjusted net income in the second quarter of 2016 include $38 million of tax expense compared to only $1 million in the second quarter of 2015. Foreign currency also unfavorably impacted net income and adjusted net income by $5 million in the second quarter of 2016. A full reconciliation of GAAP to adjusted metrics is set forth on a schedule attached hereto.
USG, owners of the Sheetrock brand, saw wallboard volumes rise 3% while wallboard prices declined roughly 1% from the second quarter of 2015.
The corporation’s Gypsum segment generated $113 million of operating profit in the second quarter of 2016. On an adjusted basis, operating profit of $102 million in the Gypsum segment improved by $5 million over the second quarter of 2015. Surfaces and substrates products drove $8 million of this improved profit.
