USG Corp.'s American unit, United States Gypsum Co., swung to a $61 million operating loss in the fourth quarter of 2010 from a year-earlier $57 million profit even though sales declined just 4.1% to $302 million, parent company USG Corp. announced today. Meanwhile, USG's building products distribution arm, L&W Supply Corp., posted an operating loss of $12 million in the fourth quarter, improving from a year-earlier $63 million operating loss, on a 7.4% drop in net sales to $250 million.
The fourth-quarter dive into red ink meant United States Gypsum Co.'s operating loss for the year increased eight-fold to $160 million in 2010 from $20 million in 2009, as net sales on a as announced that operating profits fell to a loss of $61 million during the fourth quarter of 2010. Net sales shrank 9.6% to $1.3 billion.
In contrast, L&W shrank its operating loss in 2010 to $97 million from a year-earlier $172 million as net sales shrank 17.7% to $1.06 billion.
Despite shrinking sales, L&W made improvements in 2010, president and CEO James S. Metcalf told analysts in a conference call to discuss the earnings report. He said the division was challenged by low demand, but that the fourth quarter was the distribution arm's strongest of the year. Metcalf also said the low number of new commercial projects hurt L&W, as two-thirds of its sales come from commercial projects, but that USG remained committed to L&W and to the distribution business.
The problems in America figured strongly in the Chicago-based conglomerate showing an overall net loss of $121 million and an operating loss of $95 million in the fourth quarter. That's a worse operating loss than 2009's fourth quarter ($11 million) but much better than that 2009 period's net loss ($598 million). Sales fell 3.3% to $696 million.
In the final three months of 2010, the company sold 950 million square feet of gypsum wallboard at $111.95 per thousand square feet. That's a lower volume than in 2009's final quarter, when it sold 1.06 billion square feet, but the average price of the goods sold then was 1.9% lower at $109.86 per thousand square feet.
"While 2011 is likely to be another difficult year, we think the worst may be behind us," Metcalf said in a statement. "There is still a high degree of uncertainty about the shape and timing of the recovery, but we know that our operating strategies are working and that the fundamentals underlying our core businesses are solid."