Profits narrow at Owens Corning
Owens Corning reported net sales of $1.39 billion for the second quarter of 2012, a 4.1% decrease from sales of $1.45 billion during the same period last year.
Net income for the second quarter, which ended June 30, was $39 million, compared with $78 million during the same period of 2011.
Net sales in insulation rose from $326 million in the second quarter of 2011 to $340 million in the second quarter of this year. Roofing revenue decreased however. Net sales in the second quarter 2012 were $605 million, compared with $645 million a year ago.
"Our second-quarter financial performance represents progress over the first quarter, but the rate of improvement is below our expectations, and we no longer see 2012 as a year of adjusted EBIT growth," said chairman and CEO Mike Thaman. "However, we continue to expect that the second half of the year will be more profitable than the first and that we will deliver strong free cash flow in 2012.
"Roofing profits remained strong, but compared negatively with the second quarter of last year due to continued high asphalt costs and competitive pressure in the marketplace," he added. "Insulation demonstrated excellent operating leverage and significantly narrowed its losses. In addition, our composites business made good progress in the repositioning of our European assets, the reduction of inventories and the start-up of the new melter in Mexico."
In the building materials segment, the company expects another year of strong financial performance in roofing, but with lower margins based on the current outlook for volumes, asphalt costs and pricing. The company continues to believe insulation will improve financial performance in the second half of the year and significantly narrow losses in 2012 on improved U.S. housing starts.
Brighter picture on housing from Case-Shiller
Home prices across the nation rose for the second month in a row, according to the S&P/Case Shiller Index, a closely watched indicator for the housing market. The average price of single-family, residential homes in the United States increased by 2.2% in May 2012 compared with the previous month for both the 10- and 20-city composites. On an annual basis, both composites and 17 of the 20 MSAs saw increases in May compared with April 2011. The exceptions were Boston, Charlotte and Detroit.
Taking the longer view, average home prices across the United States in May 2012 are back to their spring 2003 levels for the 20-city composite and summer 2003 levels for the 10-city composite.
“We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “However, we need to remember that spring and early summer are seasonally strong buying months, so this trend must continue throughout the summer and into the fall.”
Phoenix posted the best annual return again this month. Average home prices in that region were up 11.5% versus May 2011. Although prices are still more than 50% below their June 2006 peak, the past five months have been positive for that market, according to the report. Las Vegas posted a positive monthly change in May and saw an improvement in its annual return. But the market is still more than 60% below its August 2006 peak.
ABC Supply named partner of choice
For the sixth time, building products supplier ABC Supply Co. has been honored with a “Partners of Choice” Award from David Weekley Homes. The company received “A” rankings in both service and quality. Out of a field of approximately 150 companies, ABC Supply is one of only 12 “A, A” winners this year and one of only 18 “Partners of Choice” recipients overall.
Celebrating its 30th anniversary in 2012, Beloit, Wis.-based ABC Supply is the largest wholesale distributor of roofing in the United States and one of the nation’s largest distributors of siding, windows and other select exterior building products. David Weekley Homes, headquartered in Houston, operates in 16 cities across the United States and is the third-largest for-profit, privately held home builder in the United States.
“We are honored to again be named a ‘Partner of Choice,’” said Brent Fox, ABC Supply’s VP national business development. “We work hard to build strong partnerships with our customers and contribute to their success. This is a sign that we’re doing the right things and are providing the combination of products and service that our customers value."
David Weekley Homes implemented its comprehensive supplier evaluation system and the “Partners of Choice” Award in 2004. The proprietary evaluation platform allows the company to analyze the performance of its suppliers in diverse industries, provide feedback and recognize top achievers.