Owens Corning expects $159 million in third-quarter operating income, preliminary results Wednesday

By Caroline Salls

Pittsburgh, Oct. 23 - Owens Corning expects $159 million in third-quarter income from operations on record sales of $1.66 billion, according to a company news release.

Income from operations for the third-quarter of 2005 was $139 million on $1.62 billion in sales.

The company will announce its preliminary financial results for the third quarter and first nine months of the year on Wednesday in support of planned financing activities associated with its expected emergence from Chapter 11 at the end of October, according to the release.

According to an 8-K filing with the Securities and Exchange Commission, the outlook for 2006 shows that the company's building materials demand remained generally strong during the third quarter, but the continued weakening of the U.S. housing market began to impact business in September.

Owens Corning said leading economic indicators and forecasts during the second half of 2006 show that the new residential construction market in the United States is clearly weakening from historic highs, and the reported slowing of housing starts from record highs, recent increases in the U.S. housing inventory and reported consumer uncertainty regarding the economy is beginning to weaken demand for some of the company's building materials products.

Partially offsetting the recent softening of the housing-start related demand, the company said it believes that the Energy Policy Act of 2005 may serve to stimulate some demand for qualifying insulation products in the United States because of the potential tax credits offered to homebuilders for the construction of more energy efficient homes, and to home-owners for energy efficient home improvements.

Owens Corning said it is also launching marketing programs that are intended to expand the use of its products in residential and commercial applications.

In addition, global demand for energy-related commodities and services has caused the company to continue to experience cost inflation during 2006.

While these pressures are lessening somewhat compared with earlier in 2006, Owens Corning said it expects this inflation may not be recovered completely through price increases and will require it to achieve additional productivity gains in order to avoid margin compression.

The company said it will continue to focus on managing its capacity, introducing product offerings and eliminating inefficiencies in its business and manufacturing processes to offset the effects of any softening in demand and to achieve planned results.

Owens Corning, a Toledo, Ohio, building materials company, filed for bankruptcy on Oct. 5, 2000 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 00-3837.

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