One things says it all, “sales growth in our global composites business continued to be solid.”
Back in February I said that one ought to expect a storm or two this year and that the $240 million EBIT they predicted at the time was too conservative.
Today Owens Corning (OC) said it now estimates that 2008 adjusted EBIT will be at least $265 million, a 10-percent increase from its prior estimate of at least $240 million.
More good news was that the company repurchased approximately 1 million shares at an average price of $23.55 during the second quarter of 2008. This represents 16 percent of the company’s repurchase authorization. As of June 30, 2008, the company had 130.7 million shares outstanding. This was the first purchases under the plan, announced in Q1 2007.
Compaoite were the big driver. Composite Solutions net sales for the second quarter of 2008 were $660 million, a 70-percent increase from $389 million during the same period in 2007. The increase was primarily the result of the company’s 2007 composites acquisition and continued strong global demand for glass fiber reinforcement products. EBIT from continuing operations for the second quarter of 2008 was $71 million, compared with $26 million during the same period in 2007. The increase was primarily due to incremental earnings associated with the company’s composites acquisition and the impact of improved manufacturing productivity.
Owens has finally reached the point were the new residential housing downturn will not destroy earnings. They are also now poised so that when housing does rebound, they will fully benefit from it and earnings will be significantly impacted to the upside.
This company is no longer the Owens Corning of old as its earnings profile has been changed.
Kudos to management for a job well done.
Disclosure (“none” means no position):Long OC
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