Owens Corning Q1 Earnings Tops Estimates, Plans Strategic Investments For Growth

Owens Corning Inc OC first-quarter FY23 net sales inched down by 0.6% year-over-year to $2.33 billion, beating the consensus of $2.22 billion.
Sales by segments: Composites $585 million (down 18% Y/Y), Insulation $919 million (up 7% Y/Y), and Roofing $895 million (up 7% Y/Y).
Gross profit slumped 4.8% Y/Y to $589 million. Gross margin plunged 110 bps to 25.3%.
Operating income increased 21.4% Y/Y to $534 million, with a margin of 22.9%, up 410 bps. The company launched 11 new or refreshed products in Q1.
Adjusted EBITDA fell by 10% Y/Y to $487 million, and margin contracted by 200 bps to 21%.
Adjusted EPS was $2.77, down 5% Y/Y, above the consensus of $2.22.
Owens Corning generated cash and equivalents of $765 million at the end of Q1.
"In addition to driving strong financial performance in the near-term, we continue to make strategic investments that will expand our growth potential and enhance our earnings over the long-term," said Board Chair and Chief Executive Officer Brian Chambers.
Outlook: For 2Q23, Owens Corning expects a moderate decline in net sales with mid-teen EBIT margins. Ongoing inflation, higher interest rates, and continued geopolitical tensions will likely drag many of the company's end markets.
The company reiterated its guidance for FY23. Owens Corning expects general corporate expenses of $195 million - $205 million, capital additions of ~$520 million, and depreciation and amortization of $520 million - $530 million.
Price Action: OC shares are trading higher by 1.77% at $101.72 premarket on the last check Wednesday.

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