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Key Takeaways

• Sales of Owens Corning's legacy products slumped and the company warned of business headwinds ahead.

• The maker of insulation and other building materials anticipates near-term softness in residential construction and remodeling and North American commercial construction.

• The company beat earnings and revenue estimates for the fourth quarter.

Owens Corning (OC) shares fell 4% Monday as the maker of insulation and other building materials saw a drop in demand for its legacy products and warned of business headwinds in both North America and Europe.

Owens Corning reported fourth-quarter adjusted earnings per share (EPS) of $3.22, with revenue up 23% year-over-year to $2.84 billion. Both exceeded forecasts.

However, the revenue gains came from $564 million in sales of doors, which weren't figured in the 2023 numbers. Sales of roofing and insulation declined, while composite sales were basically flat.

The company said "residential new construction and remodeling is expected to remain soft" in the near term, and "commercial construction activity in North America is expected to start the year slower than prior year." In addition, Owens Corning said that "incremental tariffs which have not yet been implemented may also have a near-term impact."

In the current quarter, Owens Corning predicts revenue from continuing operations to grow by mid-20 percent, adjusted for glass reinforcements being moved to discontinued operations. In a transcript of the conference call provided by AlphaSense, executives said they also expect the impact of inflation to be higher than a year ago. For the full year, it anticipates revenue from its legacy products to be down slightly because of lower volumes.

Even with today's declines, shares of Owens Corning have added about 8% over the past year.

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