OC posts $21 million loss for '09 fourth quarter: Firm has year profit despite lower sales

Even record performance from its roofing shingles business failed to insulate Toledo-based Owens Corning yesterday from posting a loss for the fourth quarter of 2009.

It had a profit for the year, but sales for the quarter and for the year were down from a year earlier.

The building-materials company reported a loss of $21 million, or 17 cents a share, for the fourth quarter of 2009, better than the loss of $34 million, or 27 cents a share, for the same period of 2008, the company said.

For the year, the Toledo area's third largest corporation said it had a profit of $64 million, or 50 cents a share, up significantly from the loss of $813 million, or $6.38 a share, for 2008.

Sales for the final quarter of 2009 were $1.16 billion, down 10 percent from the $1.29 billion for the same period a year earlier. For the year, sales were $4.8 billion, down 18 percent from 2008.

Mike Thaman, OC's chairman and chief executive officer, told investors and analysts yesterday that demand for its trademark pink insulation and composite products was down because of continued weakness in the U.S. housing sector and the economy as a whole. Its composite products are used for products in transportation, wind energy, electronics, telecommunications, infrastructure, and consumer markets.

"For the first time ever, insulation manufacturers are losing money, which is a very unnatural act for us. We're not used to that at all," Mr. Thaman said.

National estimates of 700,000 housing starts in 2010 would mean OC's insulation business likely would lose money this year, though those losses would be trimmed because of aggressive cost-cutting measures, Mr. Thaman explained.

Despite the weak demand for insulation and composite products, the company was able to trim about $300 million from its outstanding debt during 2009. Mr. Thaman also told analysts that the company was likely to improve its profitability across its segments for 2010, despite materials pricing pressure from a rise in the cost of asphalt used for its shingles.

Analysts yesterday repeatedly questioned Mr. Thaman about the company's financial performance, given the continued weakness in the housing markets, as well as efforts to diversify its manufacturing footprint into Asia. The CEO said the cost of restarting some production in its composites business at the end of the year did reduce earnings slightly.

The company's stock took a hit in trading yesterday after its earnings failed to meet analysts' estimates, falling more than 7 percent to close at $24.45 a share. Even with yesterday's tumble and disappointing earnings report, the company's share price is still nearly double where it stood a year ago.

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