USG Corporation (USG), a building products maker, on Wednesday reported a net loss for the fourth quarter that widened from last year, hurt by a 27% decline in revenues. The company said that weak market conditions impacted all business segments. The company also said it expects 2010 to be another "challenging year". Shares of the company are currently down more than 6% in the regular trading session. The Chicago, Illinois-based company's net loss for the fourth quarter widened to $598 million or $6.02 per share from $349 million or $3.52 per share a year ago.
The latest quarter's results included non-cash deferred tax asset valuation allowance of $548 million, restructuring, impairment and other charges of $31 million, and income from the settlement of a lawsuit of $97 million. The company noted that the deferred tax asset valuation allowance in the latest quarter will not impact its ability to utilize its U.S. net operating loss carryforwards to offset taxable U.S. earnings in the future.
The year-ago quarter's results include pre-tax restructuring, long-lived asset impairment, goodwill and other intangible asset impairment charges aggregating $294 million, and a non-cash, deferred tax valuation allowance of $68 million. On average, 12 analysts polled by Thomson Reuters expected the company to report a loss of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 27% to $720 million from $981 million in the comparable quarter last year, and missed analysts' consensus revenue estimate for the quarter of $759.06 million for the quarter.
William Foote, Chairman and CEO of USG said, "We anticipated very difficult market conditions in 2009 and took action accordingly. Structural cost reduction initiatives and aggressive management of product margins helped to mitigate the impact of exceptionally weak demand. A continued sharp focus on overall spending and working capital, plus the successful settlement of the Lafarge lawsuit, added to the corporation's strong cash and liquidity positions."
Gross profit for the latest quarter was $8 million, up from $6 million in the same period last year. Selling and administrative expenses for the quarter declined to $85 million from $93 million a year ago. Operating loss for the quarter narrowed to $11 million from $381 million last year.
Segment wise, USG's North American Gypsum business reported net sales of $407 million, down from $505 million a year ago. L&W Supply Corporation and its subsidiaries, which comprise USG's building products distribution business, reported a 38% decline in net sales from last year to $270 million from $435 million in the previous-year quarter. Worldwide ceilings business reported net sales of $146 million, down from $171 million reported in the comparable quarter last year.
Capital expenditures for the latest quarter were $8 million, down from $29 million in the year-ago quarter.
For fiscal year 2009, USG's net loss widened to $787 million or $7.93 per share from $463 million or $4.67 per share last year. Analysts expected the company to report loss of $1.87 per share for the year.
Net sales for the year decreased 29.7% to $3.24 billion from $4.61 billion last year. Analysts expected revenues of $3.27 billion for the year.
Capital expenditures for the year were $44 million, down from $238 million in the previous year.
As of December 31, 2009, USG's cash and cash equivalents were $690 million, compared with $621 million as of September 30, 2009 and $471 million as December 31, 2008. The increase in cash since the end of September was primarily due to the receipt of $74 million, net of fees, representing a portion of the amount due to the corporation from the settlement of the Lafarge lawsuit.
In Wednesday's regular trading session, USG is trading at $13.09, down $0.92 or 6.57% on a volume of 0.68 million shares.
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