Owens Corning’s CEO was on CNBC recently and had this to say about his composite products use in auto’s.
Watch the video:
The word “housing” was not used once…….good.
Some interesting notables from the earnings call:
– “Today, about 10% of our revenue in composites results from wind energy sales. It is a fast growing market. Wind energy generates just over 1% of the world’s electricity. Wind energy in terms of me”gawatts generated is expected to grow at an average of greater than 15% annually over the next decade. The mono glass fiber in each window blade is significant. There are about 18 tons of fiber glass in each window, 6 tons per blade. Wind is an immediate and long-term growth opportunity for Owens Corning.” Thalman
– “There is little doubt that use of glass fibre composites will continue to replace traditional materials like steel, aluminum and wood as a lightweight, non-corrosive and affordable alternative. The opportunities in this business have few limits.” Thalman
Regarding housing starts:
– “I mean year-to-date start to been about a million. There were a little bit weaker in the second quarter. So, we would expect that the full year will probably come in less than a million, and I think that’s pretty consisting with consensus.
I mean just a note, I think since consensus started keeping records, that’s the first time housing starts were been less than a million if this impact happens since 1959 when they started publishing these numbers. So, it’s bad out there. The consensus seems to be that we’re going to continue to see this for another year. And we might even see a second consecutive year less than a million. We are certainly building our business plans as we go into our planning season here in the fall or not counting on the big market turnaround or to drive performance.” Thalman
Regarding composite sector:
– “We’re participating in a market that in total will grow at 1.5 to 2 times global GDP organically with some segments like wind energy that could grow high double-digits for the coming decade.” Thalman
Essentially a return to modestly normal housing conditions will mean a large increase in Owens earnings. That earnings are increasing under housing conditions not seen in 5 decades is a testament to the work Thalman has done changing the earnings profile.
View 10-Q
Disclosure (“none” means no position):Long OC, none
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