2014 adjusted EBIT in line with prior year; Board declares 6% dividend increase; insulation delivered 14th consecutive quarter of EBIT growth; increased full-year EBIT by USD 68 million; composites delivered 6th consecutive quarter of EBIT improvement; grew 2014 earnings by 50%; roofing achieved commercial objectives for the second half.
Owens Corning has reported consolidated net sales of USD 5.3 billion in 2014, in line with net sales of USD 5.3 billion in 2013.
Full-year 2014 adjusted earnings were USD 208 million, or USD 1.76 per diluted share, compared to adjusted earnings of USD 221 million, or USD 1.86 per diluted share, in 2013. Net earnings in 2014 were USD 226 million, or USD 1.91 per share, compared to net earnings of USD 204 million, or USD 1.71 per diluted share last year.
Fourth-quarter 2014 adjusted earnings were USD 55 million, or USD 0.47 per diluted share, compared with USD 52 million, or USD 0.44 per diluted share, during the same period one year ago. The company reported net earnings of USD 33 million, or USD 0.28 per diluted share, in the fourth quarter of 2014, compared with net earnings of USD 82 million, or USD 0.69 per diluted share, in 2013.
“Owens Corning made significant progress in 2014. All three businesses made meaningful contributions to earnings,” said Chairman and Chief Executive Officer Mike Thaman. “Insulation contributed over USD 100 million of EBIT on one million US lagged housing starts. Composites delivered its sixth consecutive quarter of EBIT improvement and grew EBIT for the full year by more than 50%. In Roofing, we achieved our commercial objective during the second half of the year by regaining our historical market position in a stable fourth-quarter pricing environment.”
The Board has declared a quarterly dividend of 17 cents per common share payable on 2 April 2015, to shareholders of record as of 13 March 2015, a 6% increase from the previous year.
“The Board of Directors increased the dividend based on the company’s financial outlook and cash generation,” Thaman said.
Owens Corning maintained a very high level of safety performance in 2014. While recorded injuries were higher in 2014 than 2013, the number of days lost due to injury declined dramatically.
Adjusted earnings before interest and taxes (EBIT) in the fourth quarter of 2014 was USD 107 million, compared with USD 96 million in 2013. EBIT for the fourth quarter was USD 104 million, in line with USD 104 million during the same period in 2013.
Full-year adjusted EBIT was USD 412 million in 2014, compared with adjusted EBIT of USD 416 million in 2013. Full-year EBIT in 2014 was USD 392 million, compared to USD 385 million in 2013.
During the fourth quarter, the company issued a USD 400 million bond, the proceeds of which were primarily used to pay down higher-interest notes.
The company expects to benefit in 2015 from continued improvement in the US housing market and moderate global growth.
Insulation is expected to continue the momentum built over the last few years, benefitting from growth in US residential new construction, improved pricing and operating leverage.
In Composites, strong performance throughout 2014 supports continued improvement in 2015. The company expects a 2015 EBIT improvement commensurate with 2014, less the impact associated with a stronger US dollar. At current exchange rates, the negative effect of currency is estimated at USD 20 million of EBIT.
In Roofing, the company expects the overall market demand to be in line with last year. Market dynamics in the first half of the year will largely determine how the Roofing business performs relative to 2014.
The company estimates an effective tax rate of 30% to 32%, and a cash tax rate of 10% to 12% on adjusted pre-tax earnings, due to the company’s USD 2.2 billion US tax net operating loss carry-forward.
The company expects general corporate expenses to be USD 120 million to USD 130 million in 2015. Capital expenditures in 2015 are expected to total approximately USD 355 million, including an estimated USD 55 million for the completion of a new non-wovens facility. Interest expenses are expected to be about USD 110 million.
First-quarter 2015 results will be announced on Wednesday, 22 April 2015.