Owens Corning (OC) Q4 2023 earnings summary

Executive summary

• FY 2023 net sales were $9.677B, down 1% YoY; net earnings attributable to shareholders were $1.196B, down 4%, while adjusted EBIT rose 2% to $1.805B.

• Adjusted EBIT margin expanded to 19% from 18%; adjusted diluted EPS was $14.42 versus $12.88.

• Q4 net sales were $2.304B, up 1% YoY; adjusted EBIT rose 18% to $392M, and adjusted diluted EPS increased 29% to $3.21.

• Full-year results reflected stronger Roofing, steady Insulation margins and lower Composites revenue; a strategic review was announced for glass reinforcements.

Financial highlights

• FY adjusted EBITDA was $2.313B, up 2% YoY, with a 24% margin versus 23%; Q4 adjusted EBITDA was $518M, up 13%, with a 22% margin versus 20%.

• FY operating cash flow was $1.719B versus $1.760B; free cash flow was $1.193B versus $1.314B.

• Q4 net earnings attributable to shareholders were $131M and diluted EPS was $1.46; adjusted earnings were $287M and adjusted diluted EPS was $3.21.

Outlook and guidance

• Q1 2024 net sales expected slightly below Q1 2023, with mid-teen enterprise EBIT margins; markets described as fairly stable versus Q4 2023.

• FY 2024 guidance: general corporate expenses $240M–$250M; interest expense $70M–$80M; adjusted effective tax rate 24%–26%.

• FY 2024 capital additions and depreciation and amortization each expected at ~$550M; outlook excludes uncompleted acquisitions and divestitures.

• Q1 Roofing revenue expected up low single digits YoY, with high-20s EBIT margin; shingle shipments expected up ~20%, while volumes trail the market against a strong prior-year quarter.

• Q1 Insulation revenue expected down slightly with mid-teen EBIT margins; Composites revenue expected down low- to mid-teens with mid-single-digit EBIT margins.