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Owens Corning beats target, sees more improvement

22 July 1999: US fibreglass and materials maker Owens Corning beat Wall Street“s second quarter targets recently with a 29% jump in net earnings, boosted by record income in its building products div…

22 July 1999: US fibreglass and materials maker Owens Corning beat Wall Street“s second quarter targets recently with a 29% jump in net earnings, boosted by record income in its building products division. Owens Corning said it sees strong operating results through the rest of 1999. The Ohio-based company had second quarter earnings of US$ 76 million, or US$ 1.31 per diluted share. That compares with US$ 59 million, or US$ 1.02 a share, a year ago. Analysts had pegged Owens Corning“s second quarter earnings at US$ 1.29 a share, according to First Call Corp. Revenues hit US$ 1.31 billion, up from US$ 1.29 billion in the second quarter of 1998, the company said. Strong results in the building materials division offset a 47% drop in income from operations in the composite materials business. Building materials income from operations was a record US$ 130 million on sales of US$ 1.07 billion, versus income of US$ 69 million on sales of US$ 995 million the year earlier. The company said market conditions are robust and demand is high as customers report continued backlog for remodelling projects. “With the current vibrancy of the markets we serve and the high demand for our products, we anticipate that the strong operating results of the company will continue through the remainder of the year,” chief executive Glen Hiner said in a prepared statement. Owens Corning said income from its composite materials business slipped to US$ 33 million on sales of US$ 273 million, versus income of US$ 62 million on sales of US$ 318 million in the 1998 second quarter. The company said the slide was due to poor productivity and start-up issues at its joint venture plant in India. The India venture is on track after a severe flood and electrical power failure, the company said. Owens Corning also noted it will receive an insurance settlement of about US$ 1.9 billion from a June decision in the US Supreme Court that overturned a District Court ruling on a class action suit. Those funds will be used to settle all pending and future asbestos-related claims under the national settlement programme agreed to in December.

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