Owens Cornings’ profits halved during the second quarter from the same period a year ago to total $39 million on a 4% dip in sales to $1.39 billion for the same period, the building materials manufacturer reported Wednesday. Despite recovering from a $46 million net loss in Q1, the bottom-line activity didn’t measure up to some analysts' revenue expectations and caused the company to rethink the possibility of year-end earnings adjustments.
The Toledo, Ohio-based company attributed its slower-than-expected improvement rate to high material costs and increased competition for its roofing product and a still-uncertain market for new housing starts that impacted its insulation portfolio. Together, the categories make up two-thirds of the company’s sales at $945 million (a 3% drop from a year ago) and grew earnings before interest and taxes (EBIT) to $107 million for the quarter from $103 million a year ago in the company’s building products segment.
Insulation’s EBIT improved to a loss of $16 billion for the quarter from a $38 billion loss a year ago as sales climbed to $340 million, up 4% for the same period. Roofing EBIT fell nearly 13% to $123 million while sales dropped 6% to $605 million. The composite segment saw second-quarter EBIT drop 38% to $34 million from a year ago while sales fell 6% to $498 million.
"Our second-quarter financial performance represents progress over the first quarter, but the rate of improvement is below our expectations, and we no longer see 2012 as a year of adjusted EBIT growth," said chairman and CEO Mike Thaman in a statement. "However, we continue to expect that the second half of the year will be more profitable than the first and that we will deliver strong free cash flow in 2012.”