Owens Corning delivered record earnings performance in the third quarter, continuing to benefit from strong execution in an uncertain economy and a resilient portfolio of market-leading businesses.
Owens Corning has reported that consolidated net sales increased 22% to USD 1.5 billion in the third quarter of 2011, compared with USD 1.2 billion in the same period last year.
Third-quarter 2011 adjusted earnings, based on the company’s expected full-year effective tax rate of 25%, were USD 110 million, or USD 0.90 per diluted share, compared with USD 44 million, or USD 0.35 per diluted share, during the same period last year. Third-quarter 2011 net earnings were USD 124 million, or USD 1.01 per diluted share, compared with net earnings of USD 58 million, or USD 0.46 per diluted share, in the third quarter of 2010.
“Owens Corning delivered record earnings performance in the third quarter,” said Chairman and CEO Mike Thaman. “We continue to benefit from strong execution in an uncertain economy and a resilient portfolio of market-leading businesses.”
Owens Corning’s primary safety metric improved by approximately 25% year-to-date over the company’s full-year 2010 performance. This positions the company for a tenth consecutive year of safety improvement.
Third-quarter earnings before interest and taxes (EBIT) was USD 177 million in 2011 compared with USD 69 million in the third quarter of 2010. In 2010, the company had certain items that were not the result of current operations. After adjusting for these items, Owens Corning’s third-quarter 2010 EBIT was USD 90 million.
Gross margin as a percentage of net sales was 22% in the third quarter of 2011 compared with 20% in 2010.
The company maintains a strong balance sheet with ample liquidity. The company refinanced its senior revolving credit facility in the quarter to extend its maturity to 2016 and reduce borrowing costs.
The company has repurchased 4.0 million shares of its common stock year-to-date. As of 30 September 2011, an additional 3.7 million shares remained available for repurchase.
Owens Corning’s federal tax net operating loss carry-forward was USD 2.3 billion as of 30 September 2011.
At the end of the third quarter of 2011, excluding the impact of interest rate swaps, Owens Corning had total debt, less cash-on-hand of USD 1.96 billion, compared with USD 1.57 billion at the end of 2010.
“The company’s current-year estimate for EBIT is now in the range of USD 460 million to USD 490 million, reflecting our expectation that some portion of the storm-related demand for our Roofing products will materialize in 2012, as well as a moderated view of growth in the Composites market in 2011,” Thaman said. “At the midpoint of this EBIT range, we anticipate delivering a second consecutive year of Adjusted EPS growth of nearly 40%.”
Owens Corning outlines the following additional expectations for 2011:
As a result of tax-planning initiatives, the effective book tax rate for 2011 is now expected to be 25% or less. Cash taxes are expected to be less than USD 30 million in 2011. The company estimates a long-term effective tax rate of 25% to 28% based on the blend of effective tax rates for its US and non-US operations.
Depreciation and amortization expense will be approximately USD 330 million in 2011.
Capital expenditures in 2011 are expected to total approximately USD 400 million.