USG earnings fall 95 percent
USG, a global manufacturer of building materials, posted earnings of $7 million in the third quarter, a 95 percent decrease from earnings of $153 million a year ago. Sales fell 13.3 percent to $1.3 billion from $1.5 billion last year.
“In the near term, we are scaling back operations to reduce costs,” said William Foote, USG chairman and CEO. “Since the market began to decline, we have curtailed or closed 2.6 billion square feet of wallboard manufacturing capacity, closed four L&W Supply locations and eliminated 1,100 hourly and salaried positions.”
Foote said the company is “prepared to make further adjustments to our operations as necessary.”
The company’s North American gypsum operations saw $2 million in losses, swinging from $219 million in earnings last year. The company’s L&W Supply business saw operating income of $22 million down from operating income of $53 million last year. Global operations, including ceilings and interior materials, saw increases, helping partially offset the company’s lower earnings elsewhere.
“We do not expect a quick rebound in the housing market,” Foote added. “Market conditions suggest that the housing market will remain weak for the balance of 2007 and at least through 2008.”
USG, based in Chicago, is a manufacturer and distributor of building systems for residential and remodel.
S&P places watch on BMHC
Building Materials Holding Corp. (BMHC) has been placed on a negative watch by Standard & Poor’s rating services, a possible precursor to a lowered rating over the next few months. S&P took the action following last week’s SEC filing from Chapman Capital, a BMHC shareholder that is seeking to oust chairman and CEO Robert Mellor.
“This change could lead to unexpected changes in business strategies that neither support credit quality nor stay within our expectations at the current ratings,” said S&P analyst Andy Sookram in a prepared statement.
The credit watch also made reference to “an expectation that this downturn will last longer than previously expected.”
Chapman Capital, based in Los Angeles, owns a 9 percent stake in BMHC, according to the firm. The managing member, Robert Chapman, has filed numerous SEC documents calling for changes at BMHC, the most recent being the replacement of Mellor by Stan Wilson, president of the BMC West division.
BMHC’s 2006 direct sales to professional customers were $2.8 billion. The company’s total sales in 2006 were $3.2 billion.
Stanley Works board names new member
New Britain, Conn.-based Stanley Works has named Carlos Cardoso, president and CEO of metal products company Kennametal, to its board of directors.
Cardoso, 49, joined Kennametal in 2003 as chief operating officer prior to being promoted to his current position in 2005.
Prior to his time at Kennametal, Cardoso was president of the Pump Division of Flowserve Corp., a $1.3 billion operation.
John Lundgren, chairman and CEO of Stanley Works, said Cardoso brings “a wide range of experiences in marketing, sales, service and operations and a global business perspective to our board.”
Stanley Works is a worldwide supplier of tools and security solutions.