Owens Corning's building materials segment suffered losses across the board as both earnings before interest and taxes (EBIT) and net sales fell during the first quarter, the company reported today. The segment, which produces insulation and roofing materials, revealed EBIT of $30 million on net sales of $786 million for the quarter. Earnings decreased by 65% compared to the same period in 2010, while net sales fell by just over 7%. The company calculates EBIT by subtracting related costs and expenses from net sales.
Overall, the Toledo-Ohio based company suffered an almost 50% drop in net earnings during the first quarter of 2011, compared to the same period a year ago. The composites and building materials manufacturer ended the quarter with $25 million in earnings on net sales of $1.24 billion, a 2% drop compared to first quarter 2010.
As with many companies, Owens Corning did not escape the effects of a weak residential construction market in the U.S. In a press release the company said it expects the industry to pick up modestly during the second half of the year. Company officials also remain optimistic about the roofing industry's eventual pick up. "While the roofing market continues to operate well below its potential, the company believes full-year EBIT margins of 20 percent are achievable for this business in 2011," the company said.
The insulation business is also expected to pick up for Owens Corning with improved market conditions and volume as the year progresses. The company is currently converting plants to produce EcoTouch insulation and expects such conversions to be complete by the end of the second quarter.
"During the quarter we made operating investments to expand our Composites capacity and convert Insulation facilities to produce our new EcoTouch insulation," said chairman and CEO Mike Thaman. "We expect that these investments -- combined with improving economic conditions and our recent pricing actions -- will improve profitability throughout the balance of the year."
The company's composite segment posted a 55% increase in EBIT on a 6% increase in sales to help bolster Owens Corning's overall numbers.