Owens Corning (OC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales reached $2.8 billion, up 9% year-over-year, with $311 million contributed by the newly acquired Doors segment from the Masonite acquisition.

• Adjusted EBIT was $588 million (up 10% YoY), adjusted EBITDA $742 million (up 12% YoY), and adjusted EBIT margin remained strong at 21% for the 16th consecutive quarter.

• Adjusted diluted EPS reached a record $4.64, up from $4.25 in Q2 2023; net earnings were $285 million, down from $345 million prior year.

• Masonite acquisition completed for $3.2 billion, expanding branded residential building products and establishing a new Doors segment.

• Year-to-date legacy safety performance improved 40% from the same period last year.

Financial highlights

• Net sales for Q2 2024 were $2.789 billion, up from $2.563 billion in Q2 2023; year-to-date net sales rose 4% to $5.089 billion.

• Adjusted EBIT: $588 million; adjusted EBITDA: $742 million; adjusted EBIT margin 21%; adjusted EBITDA margin 27%.

• Adjusted EPS for Q2 2024 was $4.64, up from $4.25 in Q2 2023.

• Free cash flow was $336 million; $52 million returned to shareholders via dividends in Q2.

• Return on capital for the last twelve months was 14%; liquidity at quarter-end was $1.4 billion; net debt-to-adjusted EBITDA at 2.2x.

Outlook and guidance

• Q3 2024 revenue expected to grow in the low 20% range, including a full quarter of Doors segment revenue; EBIT margin projected in the high teens, EBITDA margin in the low 20% range.

• Roofing revenue expected flat to slightly down; EBIT margin in low 30% range.

• Insulation revenue to rise low to mid-single digits; EBIT margin in high teens.

• Doors revenue to be down high single digits from Q2 run rate; EBIT margin mid-single digits.

• Composites revenue to decline low to mid-single digits YoY; EBIT margin around 10%.

• 2024 capex and depreciation/amortization each expected at $650 million; effective tax rate 24%-26%.