Owens Corning (NYSE:OC) first-quarter profit fell sharply, hurt by higher raw material prices that chipped away at its roofing business margins.
The company said it anticipates continued weakness in the U.S. housing industry to impact its building materials segment throughout this year, but it expects new residential construction in the U.S. to improve modestly in the second half of 2011.
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The Toledo-based provider of composite and building materials booked net earnings of $24 million, or 19 cents a share, compared with $48 million, or 38 cents a share, in the same quarter last year.
“Owens Corning delivered profit in line with our expectations for the first quarter driven by continued strong performance in the Composites and Roofing businesses,” Owens Corning CEO Mike Thaman said in a statement, adding the company made investments to expand its composites capacity and convert insulation facilities to produce its new EcoTouch insulation.
“We expect that these investments -- combined with improving economic conditions and our recent pricing actions -- will improve profitability throughout the balance of the year,” he said.
Revenue for the three-month period was $1.24 billion, up 2% from $1.27 billion a year ago. Analysts polled by Thomson Reuters expected, on average, earnings of 36 cents a share on revenue of $1.26 billion.
During the quarter, the company’s roofing business led the drop in earnings, due primarily to lower unit margins that were impacted by weaker selling prices and raw material inflation, including asphalt.