Please Follow Us On:

Follow Delta Gypsum on LinkedIn

Delta Gypsum on LinkedIn

Sunday, April 29, 2012

Wells Fargo "Some Signs of Improvement" in Housing

“Some Signs of Improvement” in Housing

For the better part of the past year and a half, we have identified early signs of stabilization in housing prices in some markets and we have noted an incipient recovery in homebuilding activity. We have struck a cautious tone repeatedly in recent publications of our housing chartbook, noting that the bottoming process will vary by market and the recovery in both prices and residential construction activity will take years to fully recover.
In its statement released this week, the FOMC added four words in the section dedicated to the housing sector—“some signs of improvement.” Indicators this week affirmed that notion, though perhaps not with the sort of conviction that would signal a definite firming. The S&P Case-Shiller 20-city home price index posted a nearly imperceptible increase, up just 0.15 percent in February, while the broader FHFA home price index added a more substantial 0.3 percent. The pace of new home sales picked up slightly as well with 328,000 new homes sold in March. That is a far cry from the 1 million-plus numbers during the housing boom, but it was better than the consensus had been expecting. It also follows an upwardly revised print of 353,000 new homes for the prior month—a decidedly better outturn than the 313,000 that had first been reported for February. We also learned this week that the pipeline for future existing sales seems to be filling up as well, with March pending homes sales up 4.1 percent on the month—the largest sequential increase since November.

Owens Corning Reports First-Quarter 2012 Results

First Quarter in Line with Company's Expectations; On Target for Adjusted EBIT Growth in 2012
-- Improvement in U.S. Housing Market and Global Industrial Production Growth Supported Volume Gains in all Three Businesses
-- Repositioning of European Composites Assets on Track
-- Board of Directors Authorized New Share Repurchase Program for up to 10 Million Shares
TOLEDO, Ohio, April 25, 2012 /PRNewswire/ -- Owens Corning (NYSE: OC) today reported that consolidated net sales increased 9 percent to $1.35 billion in the first quarter of 2012, compared with $1.24 billion in the same period last year.

First-quarter 2012 adjusted earnings, based on the company's expected full-year effective tax rate of 25 percent, were $11 million, or $0.09 per diluted share, compared with $27 million, or $0.22 per diluted share, during the same period last year.  The company reported a net loss of $46 million, or $0.38 per diluted share, compared with net earnings of $24 million, or $0.19 per diluted share, in the first quarter of 2011.  (See Tables 1, 2 and 3 for a discussion and reconciliation of these items.)

"Owens Corning delivered results in line with our expectations for the quarter," said Chairman and Chief Executive Officer Mike Thaman.  "We continue to be confident that we will grow adjusted EBIT in 2012.

"As compared to last year, Roofing volumes grew significantly, but margins were compressed due to asphalt cost inflation," Thaman said.  "We expect another year of strong financial performance in Roofing based on our current outlook for volumes and pricing."

Consolidated First-Quarter 2012 Results
  • Owens Corning's primary safety metric improved by 23 percent over the company's full-year 2011 performance. 
  • First-quarter adjusted earnings before interest and taxes (EBIT) were $43 million in 2012 compared with EBIT of $61 million in the first quarter of 2011.  In the first quarter of 2012, the company had certain items that were not the result of current operations.  Before adjusting for these items, Owens Corning's first-quarter 2012 EBIT was a loss of $12 million.  (See Table 2 for a reconciliation of these items.)
  • Volume growth in all three businesses drove nine-percent revenue improvement in the first quarter of 2012 over the same period last year.
2012 Repurchase Program
Owens Corning today announced that its Board of Directors has authorized the company to repurchase up to 10 million additional shares of Owens Corning's outstanding common stock.  Under a previously announced share repurchase program, 3.7 million shares continue to be available for repurchase.

Although there continues to be uncertainty in the macro-economic outlook, Owens Corning expects to grow adjusted EBIT in 2012 based on an improving U.S. housing market and continued growth in global industrial production.

Despite weakness in the European glass fiber reinforcements market, the company believes that global glass reinforcements demand will continue to grow in 2012.

As previously announced, the company is taking actions in its Composites segment to balance supply and to improve the sustainable competitive position of its European assets.  In the first quarter, the company made progress in implementing these actions to transform its Composites operation into a global network of low-delivered-cost assets and to position the business to return to double-digit margins in 2013.  In conjunction with these actions, the company anticipates incurring approximately $130 million in charges in 2012 through early 2013.

In the Building Materials segment, the company expects another year of strong financial performance in Roofing based on its current outlook for volumes and pricing.  The company continues to believe Insulation will significantly narrow losses in 2012 on improved U.S. housing.

Cash taxes are expected to be about $30 million in 2012, due to the company's $2.3 billion U.S. tax net operating loss carry forward.  The company estimates a long-term effective tax rate of 25 percent to 28 percent based on the blend of effective tax rates for its U.S. and non-U.S. operations.  The effective book tax rate for 2012 is expected to be about 25 percent on adjusted earnings.

The company expects general corporate expenses to be between $110 million and $120 million in 2012.  General corporate expenses include corporate staff and other activities that support the operations.  Expenses will be higher in 2012 primarily due to increased pension expense and higher year-over-year incentive compensation costs.

Depreciation and amortization expenses are expected to be as much as $320 million in 2012, excluding the impact of the restructuring actions in Europe.

Capital expenditures in 2012 are expected to be about $350 million

Thursday, April 19, 2012

The Builder Mobile App Index

USG Corporation Reports 2012 First Quarter Results

First Quarter 2012 vs. First Quarter 2011
Consolidated Business Highlights
  • Sales increased 13 percent to $812 million
  • Operating profit of $27 million compared to operating loss of $58 million
  • Adjusted operating profit of $29 million compared to adjusted operating loss of $49 million
Business Unit Highlights
  • U.S. Gypsum wallboard shipments totaled 1.16 BSF vs. 992 MMSF
  • Worldwide Ceilings operating profit increased 12 percent to $29 million
  • L&W same store net sales increased 13 percent
  • SHEETROCK® Brand UltraLight Panels accounted for 41 percent of all USG wallboard shipments in the United States

Construction Industry Economic Indicators

Retail sales increased 0.8 percent in March, a more than doubling of the 0.3 percent gain expected by the consensus. A 3.0 percent surge in sales at building materials and garden supply centers fueled the gain.

Housing starts posted another disappointing pullback in March, falling 5.8 percent. Much of the decline was in the volatile multifamily component, which dropped 16.9 percent. Weather may also still have had an effect.

The March index of leading economic indicators pointed to a continued moderate pace of economic growth. The index improved 0.3 percent, led by gains in financial indicators, while consumer numbers were weak.

Sales of existing homes fell 2.6 percent in March to a 4.48 million-unit pace, which was below consensus. While the pullback is disappointing, we are likely only seeing payback from the milder-than-usual winter.

Industrial production was unchanged in March, the second-consecutive month of zero growth in production, though it was still 5.4 percent higher at an annualized rate than in the fourth quarter of 2011.

Friday, April 13, 2012

Year-Over-Year Gains Occurred in Private Construction Spending

Private construction saw gains of 10.2 percent from February 2011 to February 2012, according to Census Bureau figures showing construction put in place.

Total construction spending in February topped year-ago totals by 5.8 percent as a double-digit increase in private construction offset a small drop in public sector spending," according to a new analysis of federal data released by the Associated General Contractors of America. The gains occurred despite a 1.1 percent decrease in spending from January to February and a dip of 0.8 percent the month before, based on revised data.

Ken Simonson, AGC's chief economist, commented that private nonresidential spending had an especially strong year-over-year gain, rising 14 percent from February 2011 to February 2012, although spending sank 1.6 percent from January to February. A highlight was new multifamily construction, which was up 26 percent from the previous February and 2.0 percent from January. Spending on residential improvements moved up 4.5 percent year-over-year and 1.2 percent for the month.