- Owens Corning OC reported third-quarter FY21 net sales growth of 16.2% year-over-year to $2.21 billion, beating the consensus of $2.18 billion.
- Sales by segments: Composites $591 million (+13% Y/Y), Insulation $815 million (+20% Y/Y), and Roofing $869 million (+14% Y/Y).
- Adjusted EPS improved to $2.52 compared to $1.76 in 3Q20, beating consensus estimates of $2.48.
- The gross margin expanded by 188 bps to 26.9%. The operating income increased by 34.3% Y/Y to $392 million, and the margin expanded by 238 bps to 17.7%.
- Owens Corning generated cash from operating activities year-to-date of $1.17 billion, compared to $717 million a year ago. Free cash flow of $925 million.
- Adjusted EBIT margin expanded by 290 bps to 18.1%.
- The company ended the quarter with $2 billion of available liquidity, including $920 million in cash and cash equivalents.
- During the quarter, the company repurchased 1.7 million shares for $160 million. As of quarter-end, 4.9 million shares were available for repurchase under the current authorization.
- Owens Corning has decided to explore strategic alternatives for its glass reinforcements product lines, thermoplastic dry-use chopped strands (DUCS), within the Composites business.
- FY21 Outlook: Owens Corning expects the U.S. residential housing market and global commercial and industrial markets to remain strong in the near term.
- It expects general corporate expenses of $150 million - $155 million; Capital additions of ~$460 million. Depreciation and amortization of ~$500 million.
- Price Action: OC shares closed lower by 1.16% at $90.49 on Tuesday.
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