'Choppy' Housing Yields Low Demand for Materials: CEO
Michael Thaman, the CEO and chairman of the building materials company Owens Corning, told CNBC Wednesday that a "choppy housing market," causing a weak demand for roofing and other products, was partly responsible for a third-quarter net income drop of more than a quarter.
The company's shares also fell by 6 percent.
"Our roofing business, which is a repair and remodel business, should be strong," said Thaman. "Roofing has been the weakest over the last four or five months. It's the homeowner being cautious. We are seeing near-term stress. Over the long term, people will replace their roofs."
To solve the housing crisis, Thaman said troubled homeowners need to feel confident that they can stay in their homes, service their debt and create equity value.
"What’s good for housing over the long term is always good for the US economy," said Thaman.
The company's quarterly net income fell 28 percent to $58 million, or 46 cents per share, from $80 million, or 63 cents per share a year earlier. Excluding one-time items, net income totaled 35 cents per share, less than the 37 cents per share that analysts polled by Thomson Reuters forecast on average.
Revenue fell 12 percent to $1.19 billion from $1.35 billion last year. Analysts predicted revenue of $1.26 billion.
Revenue from composites used for building rose 6 percent to $477 million. But revenue from building materials fell 21 percent to $742 million, mainly due to lower sales in its roofing business. Insulation revenue rose.
Shares fell $1.64, or 5.8 percent, to $26.56 during midday trading. The stock has traded between $20.85 and $37.36 during the past 52 weeks.