Why Owens Corning Shares Are Gaining Today

Owens Corning Inc OC second-quarter FY23 net sales inched down by 1.5% year-over-year to $2.56 billion, beating the consensus of $2.54 billion.

Adjusted EPS was $4.22, above the consensus of $3.23.

"Owens Corning delivered another outstanding quarter highlighting the capability of our teams, the value of our product lines, and the earnings power of our company," said Board Chair and Chief Executive Officer Brian Chambers. 

Sales by segments: Composites $620 million (down 14% Y/Y), Insulation $905 million (down 3% Y/Y), and Roofing $1.1 billion (up 10% Y/Y).

Gross profit rose 2.5% Y/Y to $752 million. The gross margin totaled 29.3%. 

Operating income remained stable Y/Y to $487 million. In the second quarter, six new or refreshed products were launched, bringing the first-half total to 17 launches.

Adjusted EBITDA rose by 1.2% Y/Y to $664 million, and margin expanded by 100 bps to 26%.

Owens Corning held cash and equivalents of $968 million at the end of Q2.

"Our strong and consistent cash generation combined with our solid financial position provide us the flexibility to execute on our enterprise strategy, while remaining committed to maintaining our investment-grade balance sheet and returning approximately 50% of free cash flow to shareholders over time," said Executive Vice President and Chief Financial Officer Ken Parks.

Outlook: For third-quarter 2023, the company expects overall performance to result in net sales similar to the comparable quarter in the prior year, while generating high-teen EBIT margins.

The company revised its guidance for FY23. Owens Corning expects general corporate expenses of $215 million - $225 million, compared with the previous estimate of $195 million - $205 million.

The company continues to expect capital additions of ~$520 million and depreciation and amortization of $520 million - $530 million.

Price Action: OC shares are trading higher by 4.40% at $136.53 premarket on the last check Wednesday.