Gleanings From Housing-Related Industries Conference Calls [Housing Tracker]

Quote Of The Day 

U.S. Home Insurers To Take Underwriting Losses. “The US homeowners insurance industry will report a modest underwriting loss in 2008 as rates fall due to excess capacity, an abundance of reinsurance options as well as regulatory and political pressures, Fitch Ratings says. In a new report on the industry, Fitch notes that although insurers have experienced improved underwriting results over the past six years, market fundamentals have deteriorated recently.” (Research Recap in Seeking Alpha, July 31^st)

Owens Corning Q2 2008 Earnings Call. “Duncan Palmer, CFO: Our Insulation business is clearly feeling the impact of the decline in new housing stocks… Net sales in this segment were $413 million in 2008, down 6% compared with 2007. About one half of this decline was due to a reduction in sales volumes and product mix. The remainder was due to lower sales prices as a result of competitive pressures. The Insulation business remained profitable in the very weak U.S. housing market… We continue to expect that the Insulation business will be profitable in 2008… Roofing and Asphalt sales are $475M in Q2’08 increased 15% from Q2’07, primarily related to price increases to partially offset the impact of inflation in raw materials, primarily Asphalt, and delivery costs… [and] supported by increased storm-related demand… [Our] Building Material and Services… comprised of our masonry products business and our construction service business. Q2’08 sales of $69M, were down 21% compared with 2007, primarily due to declines in our masonry products business resulting from continued weakness in new construction and repair and remodeling… Insulation will not give us the big uptick in H2 that it has historically given us.”

Michael H. Thaman – Chairman, CEO: “We think in residential construction we can be as much as 50% below trend line. We are 50% below. So there is an opportunity for as much as 100% growth in residential construction as we get back to what we believe is the long term demographic need from $7 million and $7.50 housing starts in our country. So, depending on how long we stay low that might impact how quickly we return to that kind of a macro. But the spring is getting coiled today as we operate it 950,000 or million housing starts, there is more people than in our country. As each month goes by… we are creating built in demand that's going to cause of recovery to be that much deeper.” (Seeking Alpha, July 30^th)

Black & Decker Corp. Q2 2008 Earnings Call Transcript. “Mike Mangan, CFO: On global manufacturing: “In large part, our three centers are manufacturing in Asia and China and Mexico and Czech Republic, I think, position us pretty well. We're exploring other areas of the world. I am sure you have heard a lot talk about places like India and Vietnam and we're exploring opportunities there. Do not expect a wholesale change in our manufacturing footprint.”

On outlook: “Do I see any reasonable scenario where we do not make money? The answer to that is no. I do not see us not making money in the back half in the third or the fourth quarter at any reasonable scenario to the company. We're not expecting markets to get better in the back half. If you look at the components that we sell into, like housing, we're not expecting to get better, we are not looking for the consumer to strengthen and we're not looking for the repair model market to get better. In fact, we're expecting all of those markets to continue to be down…We're expecting [international] markets to be flat to down. And I say flat to down meaning mix of our overall businesses. Europe is under pressure but certainly other markets like Latin America and Asia continue to generate very, very solid growth for us. On the industrial-commercial side, the commercial construction market certainly is not getting any better, its turning negatively, that's factored into our forecast. And, obviously, with the fastening business, we're looking at some pretty tough scenarios here relative to automotive production. So when we factor all of that together, this quarter versus a quarter ago actual outlook for the overall end markets has actually weakened a bit. Having said that, we've got an extremely strong product road that's rolling out for the back half, we've got promotional activities slated with a number of customers that we feel good about.” (Seeking Alpha, July 25^th)

Tupperware Brands Corporation Q2 2008 Earnings Call Transcript. “Rick Goings, Chairman, CEO: “We've got a broad geographic presence… We have two Europe's, our Western Europe business which is also growing, and the dynamic growing Eastern European business. But the contribution with the other parts of the world, North America, Latin America, Asia-Pacific and even sub Sahara Africa are growing… We [also] had a strong and growing footprint in emerging market economies. Year-to-date 49% of our sales have come from emerging markets… Sales in those markets are up 19% in local currency.” (Seeking Alpha, July 24^th)

 

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

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Comments

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2008 Aug 05 12:02 PM