Why Owens Corning Stock Is Getting Hammered

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of building materials producer Owens Corning (NYSE: OC  ) got nailed as much as 4.9% following release of its fiscal-first-quarter earnings.

So what: Revenue for the first quarter slipped 5.2% to $1.28 billion while adjusted earnings were flat at $35 million, or $0.29 per share. Analysts had been expecting $1.34 billion in revenue along with $0.35 in EPS, so it missed by a good clip. Investors rarely like it when earnings miss, no matter how good the outlook.

Now what: CEO Mike Thaman blamed the shortfall on weaker than expected roofing volumes. Owens Corning expects the roofing business to pick up throughout the balance of the year. The company anticipates new construction in housing to improve this year and possibly some flat to improved reroofing demand. However, Owens Corning cautions, "The first-quarter volume weakness adds some additional risk to the company's financial outlook." That statement is less than confidence inspiring.

Thaman also stated, "The current outlook for our markets and the momentum in our Insulation and Composites businesses support another strong year of earnings growth." This is again expected upon strength in U.S. home construction. Owens Corning also expects its insulation business to benefit from "improved pricing and operating leverage."

Based on analyst estimates, Owens Corning trades at a forward P/E of 17 based upon its current share price and estimated earnings per share of $2.46 for the fiscal year ending December 2014.

Your cable company is scared, but you can get rich
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2926668, ~/Articles/ArticleHandler.aspx, 9/15/2014 11:02:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement