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Mar 31, 2020
Owens Corning Q1 2020 Earnings Report
Owens Corning reported first-quarter results, delivering net sales of $1.6 billion.
Key Takeaways
Owens Corning reported consolidated net sales of $1.6 billion, a decrease of 4% compared to 2019. The company's 2020 results included non-cash pre-tax impairment charges related to the Insulation business of $987 million. First-quarter 2020 adjusted earnings were $65 million, or $0.60 per diluted share, compared with $58 million, or $0.53 per diluted share, during the same period one year ago.
Company delivered strong results in a challenging environment.
Roofing produced $64 million of EBIT and maintained 12% EBIT margins.
Insulation delivered $39 million of EBIT and doubled EBIT margins to 6%.
Composites generated $44 million of EBIT and posted EBIT margins of 9%.
Revenue by Segment
Forward Guidance
The company expects the COVID-19 pandemic will negatively impact the market outlook of its three businesses that was previously provided. The magnitude of the impact will depend on the depth and duration of the crisis, as well as the timing of the recovery in the markets served by the company. The company continues to focus on reducing costs, minimizing capital expenditures, and managing working capital.
Positive Outlook
- The company will continue to sustain strong conversion of adjusted earnings into free cash flow.
Challenges Ahead
- The key economic factors that continue to impact the company’s businesses are global industrial production, U.S. housing starts, and global commercial and industrial construction activity.
- Interest expense is currently estimated to be between $120 million to $125 million, compared with its previous estimate of $115 million.
- The company estimates an effective tax rate of 26% to 28%, and a cash tax rate of 10% to 12% on adjusted pre-tax earnings, which is due to the company’s foreign tax credit carryforwards.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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