Global producer of glass fiber reinforcements Owens Corning (OC) has lowered 2014 outlook due to soft volumes in the roofing business.
Owens estimates that roofing volumes for the first half of 2014 will be 20% lower than the year-ago level. The Ohio-based company expects that adjusted EBIT for the second quarter will be lower than $500 million announced during the first-quarter conference call. However, it will be higher than the year-ago level of $416 million.
The company experienced weakness in roofing volumes during the first quarter of 2014, which continued in April and May. Continued weakness in roofing volume has left the company brooding over the full-year financial outlook for the roofing business. In fact, we do not expect the weakness in volumes to revive in the upcoming second quarter, which is scheduled to be reported on Jul 23. However, Owens expects to recover a portion of this volume shortfall in the second half of the year through its insulation and composites businesses.
First Quarter Results
In April, Owens reported first-quarter earnings of 29 cents, flat year over year as improvement in insulation and composites businesses was offset by weak roofing volumes. Earnings lagged the Zacks Consensus Estimate of 35 cents by 17.1%.
Net sales of $1.27 billion missed the year-ago results as well as the Zacks Consensus Estimate due to weak roofing volumes.
Other Stocks to Consider
Owens Corning carries a Zacks Rank #3 (Hold). Other stocks in the building and construction sector include United Rentals, Inc. (URI), The New Home Company LLC (NWHM) and Gibraltar Industries, Inc. (ROCK). All these stocks sport a Zacks Rank #2 (Buy).