USG reported today that its building materials segment L&W Supplyearned $3 million in the third quarter of 2013 on $331 million in sales for the quarter, compared to a loss of $10 million on $300 million in sales for the same period of 2012.
The Chicago-based company, as a whole, posted operating profits of $75 million in the third quarter, compared to $29 million in the year-ago quarter. Net sales for the quarter came to $925 million, a 12% increase over 2012 net sales of $828 million.
Net income for the quarter totaled $23 million versus a $29 million loss in the same period of 2012.
“During the third quarter, all of our businesses generated an operating profit and the corporation achieved net income for the third consecutive quarter,” USG chairman, president and CEO James S. Metcalf told investors today during the company’s third quarter earnings call.
“Despite macroeconomic headwinds and some uneven economic data, particularly in the commercial segment, we believe that the recovery is strengthening in all of our end-use markets,” he said.
He pegged growth in wallboard price volume and growth in the company’s U.S. Gypsum unit as the primary driver of the improved performance. “We have generated our best third quarter operating profit since 2006,” Metcalf said. In particular, USG’s Ultralight Sheetrock brand of wallboard represented 58% of wallboard shipments in the quarter.
L&W Supply generated a second quarter in a row of positive operating results, he said, adding $3 million in net income, driven largely by a 14% increase in comp store sales in the third quarter compared to the second quarter of 2012.
“We’re seeing improved results at L&W across all of the core product areas,” Metcalf said.
The growth continued, he said, despite a “choppy” commercial market, which accounts for about 75% of L&W’s sales. “Despite fluctuations in the commercial segment L&W generated consecutive quarters of positive operating results for the first time since 2008,” Metcalf told investors.
Non-wallboard sales contributed $1 million to the company’s overall operating profit. Almost two thirds of the quarter’s results for L&W came through non wallboard products—insulation, construction steal, ceiling tile and grid, and exterior systems.