Feb. 12 (Bloomberg) -- Owens Corning Inc., a maker of insulation and roofing materials, jumped the most in more than two years after beating analysts’ fourth-quarter profit estimates as the U.S. housing market rebounded.
The company also announced its first dividend since 2000 -- 16 cents a share payable April 3 for stockholders of record as of March 14. Toledo, Ohio-based Owens Corning surged 8.7 percent to $43.20 at the close in New York, its biggest gain since October 2011.
Owens Corning’s results reflected a strengthening market for U.S. building-supply companies after a slump in residential and commercial construction at the end of last decade. Wallboard maker USG Corp., whose largest shareholder is Warren Buffett’s Berkshire Hathaway Inc., exceeded profit estimates last week, as did Vulcan Materials Co., a sand and gravel producer.
Investors are starting to believe the company’s message, stated last year, that it would increase earnings and “improve” all three of its businesses: roofing, insulation and composites, Chief Executive Officer Mike Thaman said on CNBC.
“I think investors have warmed to that,” he said.
Thaman said he expects home construction to improve in the second half of this year. New building codes and the cold weather are helping spur growth, he said, and people will reinvest in their homes as they regain equity.
U.S. housing starts on an annual basis plummeted to a low of 478,000 in 2009 from a January 2006 peak of 2.27 million. Residential starts have since recovered, rising to an annualized pace of 1.11 million in November that was the highest since 2007.
Roofing and insulation at Owens Corning both posted fourth-quarter sales gains, leading the building-materials unit to an 11 percent increase, according to a company statement. Revenue in the composites business rose 8 percent, Owens Corning said.
Adjusted profit was 44 cents a share, topping the 27-cent average estimate of analysts surveyed by Bloomberg. Revenue of $1.28 billion also exceeded the $1.21 billion average. Net income of $82 million compared with a net loss of $56 million a year earlier.
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