Residential and commercial building materials maker Owens Corning (OC, OWENQ.OB, OWENQ), Wednesday reported a profit for the third quarter, compared to a loss last year, primarily due to the absence of a huge charge present last year.
Net earnings attributable to the company for the third quarter were $80 million or $0.63 per share, compared to net loss of $807 million or $6.35 per share in the previous year.
Results for the quarter include total adjusting items amounted to $15 million and adjustment to tax expense, to reflect an expected long-term rate of 25%, of $18 million. The third-quarter 2008 results included a non-cash charge of $901 million to establish an accounting valuation allowance against net U.S. deferred tax assets related to net operating losses.
On an adjusted basis, net earnings were $78 million or $0.61 per share, compared to $73 million or $0.57 per share in the previous year.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter declined to $1.35 billion from $1.63 billion a year ago. Analysts expected revenues of $1.31 billion for the quarter.
By segment, net sales from composites declined 23% to $451 million from last year due to reduced overall demand for composite materials. Building materials net sales were $340 million, down 14% from the previous year, primarily due to demand weakness resulting from lower U.S. housing starts.
Gross margin rose to $280 million from $271 million in the previous year. Gross margin as a percentage of sales was 21% in the third quarter of 2009, compared to 17% in the same period of 2008.
Income tax expense for the quarter was $8 million, down from $892 million in the comparable quarter last year.
For the nine-month period, net earnings attributable to the company were $85 million or $0.67 per share, compared to net loss of $799 million or $6.08 per share in the same period of the previous year. Net sales for the period declined to $3.64 billion from $4.56 billion a year ago.
Looking ahead, the company said it is on track to surpass $160 million in cost savings during 2009 and also on track to meet its capital spending target of $225 million, which is a reduction of about $140 million from 2008, in each case excluding precious metal purchases.
Owens Corning's fourth-quarter and full year 2009 results are scheduled to be announced on February 17, 2010.
OC is currently trading at $22.19, down 0.03 or 0.15%, on a volume of 1.71 million shares on the NYSE.
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