Owens Corning Rises Most Since 2011 as Homebuilding Buoys Profit
Owens Corning Inc. (OC), 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 $43.21 at 1:51 p.m. in New York, following a 15 percent gain that was the biggest in intraday trading 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.
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.
To contact the reporter on this story: Ed Dufner in Dallas at email@example.com
To contact the editor responsible for this story: Ed Dufner at firstname.lastname@example.org