Roofing brings down OC sales

Published: Saturday, 6/21/2014 - Updated: 2 days ago

BY TYREL LINKHORN BLADE BUSINESS WRITER

Shares of Owens Corning slipped 6 percent Friday after the Toledo-based company cautioned earnings are likely to be lower than expected this year because the companys roofing business continues to be weak.

Officials had been holding out hope that the firm could still meet its target of $500 million in adjusted earnings before interest and taxes this year, even after a disappointing first quarter for roofing. While net sales of composites and insulation were up modestly, sales of roofing materials plummeted 18 percent.

However, on Friday the company said that business hasnt recovered as quickly as officials thought it might, with weakness continuing through April and May. OC said volumes may be down by as much as 20 percent in the years first half compared to last year.

In a news release, OC said it expects to recover a portion of that shortfall in the second half of the year, however, continued weakness in the second quarter has introduced further uncertainty in the full-year financial outlook for the companys roofing business.

Matt Schroder, a spokesman for the company, declined to comment further.

The factors that play into that, as they relate to our company and our point of view on the industry, is commentary and color we will provide during our July 23 conference call, he wrote in an email to The Blade.

Stephanie Karol, an economist at IHS Global Insight, said the market for single-family homes has not been performing as well as many people had predicted. Building permits for single-family homes have been mostly level since October, she said.

The winter certainly didnt help, but it gave a lot of people a really handy scapegoat for whats really going on and whats really going on is an affordability problem, Ms. Karol said.

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Roofing brings down OC sales