Owens Corning (NYSE:OC) shares fell premarket on Wednesday after the company reported third-quarter 2025 results that missed analyst expectations on both earnings and revenue.
Details
The company reported adjusted EPS from continuing operations of $3.67, missing the $3.71 estimate.
The company reported GAAP diluted loss per share of $5.93, versus EPS of $3.26 a year earlier.
Revenue fell 3% year over year (Y/Y) to $2.684 billion, coming short of the $2.697 billion analyst forecast.
Net loss attributable to Owens Corning came in at $495 million versus profit of $287 million in the prior-year quarter.
Adjusted EBITDA dropped 10% Y/Y to $638 million, with a margin of 24% in the quarter.
Operating cash flow totaled $918 million, up from $699 million in the year-ago period. Free cash flow rose 35% Y/Y to $752 million in the quarter.
Owens Corning ended the quarter with $286 million in cash and cash equivalents. The company is also moving forward with the planned divestiture of its glass reinforcements business, expected to close in 2025 pending regulatory approval.
The company returned $278 million to shareholders during the quarter through dividends and share repurchases, bringing year-to-date shareholder returns to more than $700 million.
Segment Performance
In the Roofing segment, sales rose 2% Y/Y to $1.24 billion on higher selling prices, with EBITDA of $423 million and a margin of 34%.
The Insulation segment saw a 7% Y/Y decline in sales to $941 million, generating $212 million in EBITDA at a 23% margin. Sales declined due to lower sales volume (-5% Y/Y) and the unfavorable impact from the divestiture of its building materials business in China and Korea.
The newly acquired Doors business contributed $545 million (-5% Y/Y) in revenue and $56 million in EBITDA, with a margin of 10%.
Management Commentary
“Our third-quarter financial results continue to demonstrate our ability to perform at a high level even in the face of challenging market conditions, as we see weakening residential demand trends in the U.S. impacting our volumes in both repair and remodel and new construction product lines,” commented Chair and Chief Executive Officer Brian Chambers.
Outlook
Owens Corning expects minimal impact from tariffs in the fourth quarter. In the fourth quarter, the company anticipates reducing its approximately $50 million tariff exposure to a net impact of about $10 million, primarily in the Doors business.
Revenue from continuing operations is projected to decline mid-to-high teens, around $2.10 billion and $2.20 billion, compared to the $2.463 billion analyst estimate.
The company expects adjusted EBITDA margins from continuing operations of 16%–18% in the quarter.
Owens Corning continues to aim for revenue growth, a mid-20% annual adjusted EBITDA margin, and $5 billion cumulative free cash flow by 2028.
The company expects continued challenges in residential new construction and remodeling due to softer market conditions and year-end inventory reductions affecting all three business segments.
Demand for essential roofing repairs is expected to drop notably in the fourth quarter on reduced storm activity and lower distribution inventories.
Also, the company projects non-residential construction in North America to decline slightly, while market conditions in Europe are expected to improve gradually.
Price Action: OC shares were trading lower by 2.37% to $119.81 premarket at last check Wednesday.
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