Owens Corning (OC) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales reached $3.0 billion, up 23% year-over-year, with the newly acquired Doors segment contributing $573 million in revenue and $36 million in EBIT.

• Adjusted EBIT was $582 million (19% margin), and adjusted EBITDA was $766 million (25% margin), both up year-over-year.

• Net earnings were $321 million, with diluted EPS of $3.65 and adjusted EPS of $4.38.

• Strategic initiatives included the Masonite acquisition, divestiture agreements for China and Korea building products businesses, and investments in U.S. fiberglass insulation capacity.

• Recognized for top-tier ESG performance, ranking first in industry and in the Top 10 of the 100 Best Corporate Citizens list.

Financial highlights

• Net sales increased to $3,046 million from $2,479 million in Q3 2023; nine-month net sales rose 10% to $8.1 billion.

• Adjusted EBIT of $582 million and adjusted EBITDA of $766 million, up 12% and 19% year-over-year, respectively.

• Adjusted EPS of $4.38, up from $4.18 in the prior year; diluted EPS was $3.65.

• Free cash flow for Q3 was $558 million; $252 million returned to shareholders via dividends and buybacks.

• Liquidity at quarter-end was $1.8 billion, with $499 million in cash and $1.3 billion in available credit.

Outlook and guidance

• Q4 2024 revenue growth expected around 20%, with legacy business revenue slightly below prior year and Doors segment addition.

• Q4 EBIT margin expected in mid-teens, EBITDA margin around 20%.

• Roofing revenue projected down mid-single digits; insulation revenue down slightly; doors revenue down high single digits sequentially; composites revenue similar to Q4 2023.

• General corporate expenses for 2024 expected at ~$250 million; effective tax rate 24%-26%; capital additions and depreciation/amortization each at ~$650 million.

• Market conditions expected to remain choppy through year-end, with improvement anticipated in 2025 as interest rates decline.