Owens Corning reported strong 4Q 2006 net income in its 1Q after emerging from Chapter 11. The building materials company saw solid results in its composite solutions business, which helped to offset …
Owens Corning reported strong 4Q 2006 net income in its 1Q after emerging from Chapter 11. The building materials company saw solid results in its composite solutions business, which helped to offset weakness in the roofing and asphalt segment. However, Owens Corning said the “significant slow down in the US housing starts is expected to carry well into 2007”, which will hit 1Q 2007 results, seasonally the company“s weakest quarter. Owens Corning expects 2007 to be challenging, but business should improve if housing starts begin to stabilize. The Toledo, Ohio, company said it had 4Q 2006 net income of USD 7.7 billion. A year earlier, when the company was in Chapter 11, net income was USD 338 million. Adjusted income from operations fell to USD 143 million from USD 149 million a year earlier. This includes charges of USD 152 million in the latest quarter and a credit of USD 81 million the year before. Owens Corning“s sales fell 14% to USD 1.48 billion from USD 1.71 billion due to continued weakness in US housing starts and a lack of storm-related demand for roofing products. Owens Corning“s board approved a share repurchase program of up to 5% of outstanding common stock, representing an investment of about USD 200 million. Battered by asbestos lawsuits, Owens Corning emerged from six years of bankruptcy protection on 31 October 2006. Its reorganization plan established a trust to pay for current and future claims of illness from asbestos found in the company“s products. The company sold asbestos-containing Kaylo insulation from 1953 to 1972. Owens Corning will explore strategic alternatives for its siding solutions business, the largest component of the other building materials and services segment, as well as Fabwel. The latter is a unit within the composite solutions segment and is separate from the planned joint venture with France“s Compagnie de Saint-Gobain. Owens Corning expects a mid-2007 completion of this process. On 20 February 2007, Owens Corning announced it was forming a joint venture with Saint-Gobain that will merge the two companies“ reinforcements and composite businesses. Owens Corning will hold a 60% stake in the venture, OCV Reinforcements. Since leaving bankruptcy protection, Owens Corning shares are most recently up USD 3.56, at USD 31.61 from USD 28.05 on 31 October 2006.
