Owens Corning Stock Surges As Q4 Results Surpass Estimates; Boosts Buyback

Owens Corning OC reported fourth-quarter FY21 net sales growth of 10.7% year-over-year to $2.13 billion, beating the consensus of $2.04 billion.
Sales by segments: Composites $608 million (+11% Y/Y), Insulation $863 million (+19% Y/Y), and Roofing $712 million (+1% Y/Y).
Adjusted EPS was $2.20 (+16% Y/Y), beating the consensus of $1.91.
The gross margin expanded by 110 bps to 26.2%. The operating income increased by 18.8% Y/Y to $323 million, and the margin expanded by 100 bps to 15.2%.
Adjusted EBITDA increased 5.6% Y/Y to $452 million, and margin contracted by 100 bps to 21.2%.
Owens Corning generated cash from operating activities of $1.5 billion in FY21, compared to $1.14 billion a year ago. Free cash flow of $1.09 billion with Conversion of 112%.
The company's board approved a share repurchase authorization for up to 10 million shares, in addition to its previously announced share buyback program, which had 3.4 million shares available as 2021-end.
Outlook: For the first quarter of 2022, the company expects overall performance to result in net sales and adjusted EBIT growth Y/Y.
The company expects the U.S. residential housing market and global commercial and industrial markets to remain strong in the near term.
The company expects FY22 general corporate expenses of $160 million - $170 million, Capital additions of ~$480 million, and Depreciation and Amortization of ~$520 million.
Price Action: OC shares are trading higher by 6.99% at $98.79 on Wednesday.

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