EmailOwens Corning (OC) lowered its 2012 earnings outlook, reflecting a weaker environment for its Roofing and Composites businesses. Full-year adjusted. EBIT for the co are now expected to be in the range of $280-310 million (down from $360-420 million) with the primary uncertainty through the remainder of the year attributed to roofing volumes. Preliminary third-quarter adjusted EBIT is $81 million (ests near $124 million). The company previously disclosed late second-quarter weakness in the U.S. roofing shingle market, which persisted early into the third quarter. While there was some improvement through most of the third quarter, shipments weakened following a mid-September price increase and are not expected to improve for the remainder of year. As a result, the company has lowered its Roofing revenue outlook for the full-year, now estimated to be approximately $2 billion.
Pricing improved sequentially in the third quarter on slightly higher asphalt costs. While fixed cost controls continue to be effective, the significant revenue decline in the second half of 2012 will result in margin compression. Despite the market weakness of the second half, the market outlook and competitive environment supports reaffirmation of the company's mid-term guidance of mid-teen or better EBIT margins. 2H12 Composites demand will be impacted by lower global industrial production, particularly in Europe, as well as by the weaker U.S. roofing market. The company's estimate for global glass fiber market demand growth in 2012 has been reduced to approximately three percent, compared to the long-term historical average growth rate of five percent. The co maintains its earlier guidance for the Insulation business of significantly narrowing losses in 2012.
