The housing recovery continues. USG Corp (USG) makes wallboard (gypsum) and ceiling tiles. Gypsum sales in North America were up 20 percent year-over-year; prices were roughly flat; volume increased 12 percent.
USG CEO: "Our wallboard results were the strongest we have seen in over three years...we continue to see signs of a housing recovery".
But the stock is trading down: there was a bigger-than-expected loss, due to weaker margins (higher costs) and poorer sales of their other division, ceiling tiles. These ceiling tiles are largely used in commercial buildings and reflects what USG calls the "uneven" recovery.
Bottom line: residential construction strong,commercials still spotty.
1) Boise Cascade (BCC), another play on housing, had a terrific IPO today, pricing at $21, above the price range of $18-$21, opening at $35.44 and trading midday above $26;
2) Real estate company Realogy (RLGY), continues to sit near new highs after pricing its IPO last October at $27, now $45;
3) TRI Pointe Homes (TPH), first home builder to go public in nearly a decade, priced last week at $17, above $14-$16 range. It opened at $18.03, currently trading at $18.60.
4) Home building stocks have settled in to just below new highs, despite high valuations. Barclays (BCS) downgraded several big names this week precisely because of high valuations.
Elsewhere, the commentary on the global economy remains very cautious.
Truck-engine maker Cummins (CMI) beat on the top and bottom line, but noted that "there is uncertainty surrounding the timing and pace of improvement in end markets in 2013".
Revenue projections for 2013 are now flat to down five percent, versus analyst estimates of a three percent gain.
And 2012 ended with a whimper: "demand declined across most geographies and end markets in the second half of 2012 as the global economy slowed".
