Owens Corning OC reported better-than-expected results for first-quarter 2025, wherein adjusted earnings and net sales surpassed the Zacks Consensus Estimate. This marks the 24th consecutive earnings beat for the company. Year over year, the top line grew while the bottom line declined.
The quarter’s performance was attributable to strong commercial and operational execution in mixed markets, including positive price-cost mix. During the quarter, the top line witnessed an uptrend mainly due to strong contributions from the Roofing and Doors segments, somewhat offset by softer performance of the Insulation segment.
It is to be noted that from the first quarter, Owens Corning will be reporting through three segments, as it has reassigned the former Composites reportable segment's assets and liabilities into the Roofing and Insulation reportable segments.
Despite the several external challenges, the company will focus on growing its business and profitability through 2025. It aims to execute capital-efficient investments to strengthen its market position and drive long-term growth, along with sustaining its improved EBITDA margins and ensuring shareholder value.
Owens Corning stock lost 8.6% during yesterday’s trading session but inched up 0.1% in the after-hours.
The company reported adjusted earnings per share (EPS) of $2.97, which topped the Zacks Consensus Estimate of $2.82 by 5.3%. In the year-ago quarter, it reported an adjusted EPS of $3.40.
Owens Corning Inc Price, Consensus and EPS Surprise
Owens Corning Inc Price, Consensus and EPS Surprise
Net sales of $2.53 billion marginally surpassed the consensus mark of $2.52 billion by 0.5% and rose 25% year over year. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Owens Corning’s Segment Details
Roofing: The segment’s net sales were $1.12 billion, up 2% from the year-ago value of $1.1 billion. The uptick was driven by higher selling prices of $37 million, partially offset by lower volumes of approximately 1%.
EBITDA was down to $332 million from $338 million reported last year. EBITDA margin contracted 100 basis points (bps) to 30% year over year.
Insulation: This segment’s net sales were $909 million, down 5% year over year. The downtrend was due to lower sales volumes of about 6% and a $10 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars. This was partially offset by higher selling prices of $22 million.
EBITDA was up 0.9% year over year to $225 million from $223 million. EBITDA margin expanded 200 bps to 25% year over year.
Doors: This segment reported net sales of $540 million during the quarter, attributed to the acquisition of Masonite, which was completed on May 15, 2024.
EBITDA and EBITDA margin were $68 million and 13%, respectively.
Operating Highlights of OC
Adjusted EBITDA improved 9.7% on a year-over-year basis to $565 million. Adjusted EBITDA margin contracted 400 bps to 22% compared with 26% reported in the year-ago quarter.
OC’s Financials
As of March 31, 2025, Owens Corning had cash and cash equivalents of $400 million, up from $321 million at 2024-end. Long-term debt, net of the current portion, totaled $5.05 billion, down from $5.07 billion at 2024-end.
In the first three months of 2025, net cash used by operating activities was $49 million against net cash provided by operating activities of $24 million in the year-ago period. Free cash flow was $(252) million compared with $(128) million a year ago.
OC Unravels Q2 Guidance
Revenues are anticipated to grow in high single-digits year over year compared with $2.5 billion reported in 2024. Owens Corning expects building products end markets in North America and Europe to provide relatively strong opportunities.
Adjusted EBITDA margin is expected to be in the low-to-mid 20% range.
Segment-wise, the Roofing segment’s revenues are expected to be up in low-single digits. The company expects industry shipments for U.S. shingle end-market demand to be down low to mid-single digits, with OC shingle volumes in line with the market. EBITDA margin is expected to be slightly below last year’s reported value of 35%.
For Insulation, revenues are anticipated to be down in mid-single-digits year over year. The segment’s EBITDA margin is expected to be near mid-20%.
The Doors segment’s revenues are expected to be up in low-single digits sequentially. The segment’s EBITDA margin is expected to range between low double-digit to low-teens, almost in line sequentially.
Owens Corning Affirms 2025 Outlook
The company still expects general corporate expenses to be approximately $240-$260 million.
Interest expenses are still estimated to be within $250-$260 million.
Capital additions are expected to continue at an approximate value of $800 million and depreciation and amortization are expected to be $650 million. The company still expects an effective tax rate of 24-26%.
OC's Zacks Rank & Recent Construction Releases
Owens Corning currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TopBuild Corp. BLD reported mixed results for the first quarter of 2025, wherein its adjusted earnings topped the Zacks Consensus Estimate and the net sales missed the same. Year over year, both metrics declined.
The quarterly performance reflects lower sales volume in the Installation segment, mainly due to softened housing demand caused by affordability concerns. Also, increased SG&A expenses and the lingering inflation added to the performance decline. However, strength in the Specialty Distribution segment somewhat offset the downward trend during the quarter. TopBuild remains optimistic about its opportunities in the maintenance and repair needs in the commercial and industrial sectors, along with the long-term growth expectations in the residential market.
Boise Cascade Company BCC reported mixed first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and sales topping the same. On a year-over-year basis, both the top and bottom lines declined.
The company's quarterly performance was mainly marred by lower selling prices and sales volumes across the products it manufactures and distributes. Operations were also impacted by weak demand, unfavorable weather and scheduled downtime at the Oakdale mill. Going forward, Boise Cascade plans to stay flexible as market conditions evolve through the second quarter. A strong balance sheet supports continued investments aligned with long-term trends in residential construction.
Louisiana-Pacific Corporation’s LPX, or LP, reported better-than-expected first-quarter 2025 results, with adjusted earnings and net sales beating the Zacks Consensus Estimate. On a year-over-year basis, the bottom line declined while the top line remained flat.
The quarter’s performance reflects strength in the company’s Siding business, mainly backed by ExpertFinish growth, share gains in new residential construction and improving shed market. This growth was partially offset by soft contributions from the Oriented Strand Board segment. Despite uncertainties surrounding the new tariff regime and an inflationary market scenario, Louisiana-Pacific is well-positioned for 2025. Backed by its in-house abilities, strategic focus on higher-margin products and its position across the diverse end markets, LPX aims to navigate through the market risks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
