USG Earnings Fall Sharply on Housing Downturn
Building materials maker USG posted sharply lower second-quarter earnings on Tuesday and said the housing market downturn was likely to continue for some time.
Net income fell to $56 million, or 56 cents a share, from $176 million, or $3.03 a share, a year earlier.
Excluding restructuring charges, USG earned 65 cents a share, in line with the average forecast of analysts as compiled by Reuters Estimates.
Chief Executive William Foote said the housing recession is entering the second year of what is likely to be a multiyear downturn.
"The housing market continued to deteriorate in the second quarter, impacting both sales and earnings," Foote said in a statement.
"This market is burdened by an excess supply of new and existing unsold homes. The unusually large inventory of unsold homes will depress new construction and put continued pressure on volumes and prices of building materials until the excess inventory is absorbed," he said.
USG's net sales for the quarter fell to $1.41 billion from $1.57 billion a year earlier.