Owens Corning (OC) recently had an investors conference and there were very interesting items disclosed. (Here is the presentation.)
OC recently raised guidance for this year 10% (EBIT) to "in excess" of $265 million. Then the company said recent "roofing activity" could create an additional 10% upside to that, meaning EBIT would be "in excess" of $292 million.
The translation for "active roofing" season is "hurricanes". After two years of essentially none, this season has already seen 1 major, 1 tropical storm and it looks like two more on the way in the next couple of weeks. When one considers 75% of the asphalt roofing jobs in the US are "replace or repair", it easy to see how an active but non-catastrophic storm season helps earnings.
The majority of the presentation focused on the composites division. It is growing both margins and earnings at a double digit clip. Currently Owens Corning is the world's leading producer of glass fibers, technical fibers and specialty glass mats. That makes it the number one supplier of glass fibers for wind turbines. Global composites demand, now roughly $8 billion a year, is expected to grow at twice the rate of global GDP for the foreseeable future.
The real beauty of the composites business? Only 7% of revenues comes from US housing. 74% of the revenues come from non-US and Canada sources.
The stock has drifted up 20% from its July lows and should the current storm track continue, look for that, and the near term outlook for the company to improve dramatically.
Disclosure: Long OC