Continued robust profits in roofing and break-even returns for insulation enabled Owens Corning's building materials segment to more than quintuple its earnings before interest and taxation (EBIT) to $55 million in the fourth quarter from $9 million in the year-earlier period, the company announced today. Building material sales rose 7.5% to $771 million.
Those returns helped segment EBIT for all 2011 to rise 18% from 2010 and reach $332 million on a 9% gain in net sales to $3.54 billion. Looking ahead, "Owens Corning expects that the factors that have sustained Roofing margins in recent years will continue to drive profitability," the Toledo, Ohio-based firm said in a statement. "The company believes Insulation will significantly narrow losses in 2012."
During the October-December quarter, EBIT for roofing products grew 48.6% to $55 million on a 12.9% sales gain to $384 million. For the year, earnings before interest and taxes in roofing rose 5.9% to $429 million as sales climbed 17.4% to $2.17 billion.
The beleaguered insulation unit, meanwhile, managed to break even in the fourth quarter after posting a $22 million EBIT loss a year earlier. Sales grew 8.7% to $387 million. But the full-year results remained weak: insulation recorded a $97 million EBIT loss vs. a $102 million loss in 2010, even though sales increased 4.5% to $1.37 billion.
All Owens Corning results reported today were for worlwide operations. No specific breakouts for U.S. business were given.
Company-wide, net earnings swung to a $50 million profit in 2011's fourth quarter from a year-earlier net loss of $110 million, even though sales grew just 2.4% to $1.2 billion. But that return to profit wasn't enough to keep full-year net earnings from shrinking dramatically, hitting $276 million in 2011 from 2010's $933 million. Sales across the company in 2011 rose 6.8% to $5.34 billion.
"We anticipate improved housing starts in the U.S. and modest growth in the global economy," chairman and CEO Mike Thaman said. "Strong performance from our Building Materials segment will more than offset the impact of near-term market challenges in our Composites segment, resulting in growth in adjusted EBIT and strong cash performance."