Composites boost OC's Q1 results

OWENS CORNING (OC), Toledo, Ohio, USA, reports consolidated net sales of US$1.35 billion during the first quarter (Q1) of 2008, a 20% increase over the first quarter of 2007.

The year-over-year increase was a result of the acquisition of Saint-Gobain's reinforcements and composite fabrics businesses in November 2007. These higher sales were offset by weaker demand for the company's building materials products because of the downturn in the US housing market.

Earnings before interest and taxes (EBIT) from continuing operations in the 2008 first quarter were $19 million, compared with $32 million during the same period in 2007. This decrease reflects lower demand for building materials products and higher energy and raw material costs.  

"Business results for the first quarter were encouraging and met our expectations," says Mike Thaman, chairman and chief executive officer. "Our performance for the quarter validates the actions we took during the second half of 2007 to rework our business mix. The $100 million in cost-reduction actions that we targeted for 2008 are now fully in place."

"Our acquisition of Saint-Gobain's reinforcements and composite fabrics businesses is paying off, delivering sales growth outside the US," he adds. "We are on track to achieve at least $30 million in acquisition-related synergies in Composites in 2008 with EBIT margins approaching 10%, excluding metal lease expense. The strength of our Composites business and our excellent market position in building materials will carry us through a weak US housing market in 2008."

In the company's Composite Solutions business, net sales for the 2008 first quarter reached $666 million, an 82% increase from the same period in 2007. This was driven by sales associated with the acquisition of the Saint-Gobain businesses. EBIT from continuing operations for the first quarter of 2008 was $64 million, compared with $25 million during the same period in 2007. The increase was primarily due to higher earnings associated with the company's composites acquisition and the impact of improved manufacturing productivity. 

Owens Corning; www.owenscorning.com

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