Owens Corning Clocks 16% Sales Growth In Q2

  • Owens Corning OC reported second-quarter FY22 net sales growth of 16% year-over-year to $2.6 billion, beating the consensus of $2.57 billion.
  • Adjusted EPS was $3.83 (+43% Y/Y), above the consensus of $3.32.
  • Sales by segments: Composites $719 million (+23% Y/Y), Insulation $934 million (+16% Y/Y), and Roofing $1 billion (+11% Y/Y).
  • Gross margin improved by 62 bps to 28.2%. Operating income increased 14.6% to $487 million, with a margin of 18.7%, down 26 bps.
  • Adjusted EBITDA improved by 24% Y/Y to $656 million, and margin expanded by 100 bps to 25%.
  • Owens Corning generated an operating cash flow for year-to-date of $624 million (-11% Y/Y) and a free cash flow of $412 million (-22% Y/Y).
  • During the quarter, Owens paid dividends of $35 million and repurchased 1 million shares of common stock for $86 million.
  • In July, the company agreed to acquire the remaining 50% interest in an existing joint venture based in the U.S. that produces nonwoven roofing mat.
  • "Our strong and consistent cash generation combined with our solid financial position provides us the flexibility to execute on our enterprise strategy, while remaining committed to returning at least 50% of free cash flow to shareholders over time,” stated EVP and CFO Ken Parks.
  • Outlook:  For 3Q22, Owens Corning expects overall performance to result in net sales and adjusted EBIT growth for the quarter.
  • The company expects general corporate expenses of $170 million - $180 million, capital additions of ~$480 million, and depreciation and amortization of ~$520 million.
  • Price Action: OC shares are trading higher by 0.04% at $82.82 on the last check Wednesday.
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