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Does USG Have the Eye of the Tiger?

Christopher Barker
January 30, 2009

Reflecting upon the very different world that we inhabited just six months ago, I am struck by the profound ways in which Fools have been forced to change their expectations and measure success in completely different ways.

For the intrepid group of value investors who have opted to ride out this Category 5 storm with shares of USG (NYSE: USG  ) , I'm sure expectations have had to remain in liquid form. Having looked into the eye of the storm, expectations can go no lower than simple survival. As successive quarterly losses batter the company's bottom line, Fools are hoping USG has the eye of the tiger.

I won't spend long gazing into the wallboard specialist's operational results ... suffice it to say they were horrendous. USG lost at least $172 million for the fourth quarter of 2008, compared to a $32 million loss a year earlier. Selling and administrative costs as a percentage of sales rose as a result of lower volumes, while interest costs on the company's mounting debt climbed higher as well. This is USG’s fifth consecutive quarterly loss.

Further curbing expectations, USG reminds us that a massive goodwill impairment charge of as much as $226 million remains imminent. At this stage, with new housing starts at their lowest level in at least half a century, and homebuilders like Toll Brothers (NYSE: TOL