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Owens Corning (NYSE:OC) reported today that consolidated net sales increased 28 percent to $1.6 billion during the third quarter, compared with $1.3 billion in the third quarter of 2007. Third-quarter sales were up due to strong performance in
the Roofing and Asphalt and Composites businesses.

Excluding comparability items, Owens Corning's adjusted earnings from continuing operations were $94 million, or $0.72 per adjusted diluted share, compared with $56 million, or $0.42 per adjusted diluted share during the third quarter last year.

"I'm pleased with the quarter as the results are in line with our objectives for the year," said Mike Thaman, chairman and chief executive officer. "The integration of our composites acquisition is on track. We are exceeding our year-one synergy goals. Our Roofing and Asphalt business has improved performance with a streamlined asset base, significant productivity and an improved product mix. Our Insulation business will be profitable for the year in a very difficult U.S. housing market. We've maintained a strong balance sheet and are benefiting from a solid capital structure that provides more than adequate liquidity."

Owens Corning continues to estimate that 2008 adjusted EBIT will be at least $265 million. The company previously announced that strength in Roofing and Asphalt performance creates an additional upside of up to 10 percent in that adjusted EBIT guidance. The company excludes from this estimate items impacting comparability.

During the first quarter of 2007, Owens Corning announced a share buy-back program under which the company was authorized to repurchase up to 5 percent of Owens Corning's outstanding common stock. During the third quarter, the company repurchased 1.9 million shares at an average price of $22.23 per share.

For the nine-month period ending September 30, 2008, the company repurchased 2.9 million shares at an average price of $22.70 per share. On September 30, 2008, the company had 128.8 million shares outstanding and approximately 3.6 million shares remaining available for repurchase under the current program.

We have been saying this for a while now, after two years of no storm activity in the US, even a few moderate storms would be a boom for Owens Corning. We got a couple this year and the results reflect that.

If you look at the business of OC, the company has hit a "perfect storm" (pun intended) the last couple years. Housing activity ground to a halt and there were no storms to boost the repair business. The argument can be made that OC earnings bottomed last year and early this year. It is hard to imagine the same or worse scenario happening again in the near future.

If that is true then earnings for OC have bottomed and ought to continue to rise from here.

Disclosure: Long OC

Source: Owens Corning's Perfect Storm