Owens Corning (OC)

Owens Corning is a building products leader committed to building a sustainable future through material innovation, with products providing durable, sustainable, and energy-efficient solutions. The company operates in the building products industry, manufacturing and selling roofing, insulation, and doors products globally. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation. Demand for products is driven by residential and non-residential construction activity, repair and remodeling, and increasingly stringent building codes and the growing need for energy efficiency.

Owens Corning holds leading market positions in its major product categories. According to various industry reports and Company estimates, the Roofing segment is the second largest producer of asphalt roofing shingles in the United States, and the Insulation segment is North America's largest producer of residential, commercial and industrial fiberglass insulation. The Doors segment is one of North America's largest producers of interior and exterior doors. Principal methods of competition include innovation and product design, service, location, quality, price, and compatibility of systems solutions. Key competitors include other asphalt shingle manufacturers, fiberglass insulation manufacturers, and door producers.

The company generates revenue through the manufacture and sale of building products across three reportable segments: Roofing, Insulation, and Doors. Revenue is recognized at a point-in-time when control of goods transfers to the customer, with substantially all revenue recognized upon shipment or at other predetermined control transfer points. Customer volume commitments are generally short-term, and the company does not have a significant manufacturing backlog. Products are sold primarily through distributors, home centers, lumberyards, retailers, and contractors in the United States, Canada, Europe, and Latin America.

The Roofing segment's primary products are laminate asphalt roofing shingles, along with roofing components, composite lumber, and oxidized asphalt primarily used in residential construction. Roofing also manufactures and sells glass mat and specialty veil materials used in building and construction applications. In 2025, the Roofing segment accounted for approximately 43% of total reportable segment net sales. The segment is vertically integrated, processing asphalt for use in shingle manufacturing and selling processed asphalt to other manufacturers. Demand is driven by residential repair and remodeling activity and new residential construction, with roofing damage from major storms potentially increasing demand.

The Insulation segment includes a diverse portfolio of high, mid, and low-temperature products with a geographic mix across the United States, Canada, Europe, and Latin America. Products include thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing, glass fiber pipe insulation, and stone wool insulation, sold under brand names such as Owens Corning PINK Next Gen FIBERGLAS Insulation, FOAMULAR, FOAMGLAS, and Paroc. In 2025, the Insulation segment accounted for approximately 36% of total reportable segment net sales. Demand is driven by North American new residential construction, repair and remodeling activity, and non-residential construction activity.

The Doors segment's primary products are residential interior and exterior doors made of wood, glass, fiberglass, and metal, along with door components such as frames, sills, and weather-stripping. Other products include aluminum-framed glass doors and window solutions for luxury homes. In 2025, the Doors segment accounted for approximately 21% of total reportable segment net sales. The segment was created through the acquisition of Masonite International Corporation on May 15, 2024, for a total purchase price of $3.2 billion ¹. The addition of Masonite's market-leading doors business creates a new growth platform for the Company, strengthening its position in building and construction.

Net sales from continuing operations increased to $10,103 million ² in 2025 from $9,851 million ³ in 2024. Net loss from continuing operations attributable to Owens Corning was $188 million ⁴ in 2025, compared to net earnings of $947 million ⁵ in 2024. The decline was primarily driven by a $1,135 million ⁶ pre-tax non-cash goodwill impairment charge related to the Doors reporting unit. Adjusted EBITDA from continuing operations was $2,268 million ⁷ in 2025, compared to $2,468 million ⁸ in 2024. Net cash flow provided by operating activities was $1,786 million ⁹ in 2025.

In 2026, the Company expects general corporate expenses to be approximately $245 million to $255 million ¹⁰. The Company expects capital expenditures of approximately $800 million ¹¹ in 2026, primarily funded through cash flows from operations.

The Company expects non-discretionary roof replacement activity to ease in the near-term for the Roofing segment. Uncertainties that may impact Roofing demand include demand from storms and other weather-related events, competitive pricing pressure, and the cost and availability of raw materials, particularly asphalt. The Company expects global non-residential construction markets to be relatively stable in the near-term. The Company will continue to focus on managing costs, capital expenditures, and working capital to best service market demand.

For the Insulation segment, the outlook for demand is driven by North American new residential construction, remodeling and repair activity, as well as non-residential construction activity in the United States, Canada, Europe, and Latin America. The Company expects the new residential construction market in North America to remain challenged in the near-term, driven by an overall weakness in housing starts due to mortgage rates. The global non-residential construction markets are expected to be relatively stable in the near-term. The Company continues to concentrate on driving productivity, managing costs, capital expenditures, and working capital as it positions itself to expand capacity within its existing manufacturing network.

For the Doors segment, the outlook is driven by the new residential construction and residential repair and remodeling markets in North America and Europe. The Company expects the North America residential new construction market to remain challenged in the near-term, with discretionary residential repair and remodeling activity in North America remaining soft. Due to a weak macroeconomic outlook, the Company expects these markets to remain challenged. The Company will concentrate on managing costs, capturing synergies, capital expenditures, and working capital.

The Company has implemented short- and long-term mitigation efforts to partially offset the impact of enacted tariffs on its operating profits with supply chain adjustments and productivity and cost savings actions. Based on current tariff policies, the Company expects to partially offset the operating profit impact of the enacted tariffs. To the extent additional tariffs or other trade restrictions are enacted and the Company is unable to offset the tariffs or the tariffs negatively impact demand, the Company's revenue and profitability could be adversely impacted.

On May 13, 2025, the Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase up to 12 million shares ¹² of the Company's outstanding common stock. In 2025, the Company repurchased 5.9 million shares ¹³ of the Company's common stock for $777 million ¹⁴, inclusive of applicable taxes, under previously announced Repurchase Authorizations. As of December 31, 2025, 12.5 million shares ¹⁵ remained available for repurchase under the Repurchase Authorizations. The Company declared dividends of $2.86 ¹⁶ per share in 2025.

The Company expects to have capital expenditures of approximately $800 million ¹⁷ in 2026. Capital expenditures were $824 million ¹⁸ in 2025. The Company expects that capital expenditures will primarily be funded through cash flows from operations.

The Company faces headwinds from low levels of residential or non-residential construction activity, which have a material adverse impact on its business and results of operations. Interest rates increased substantially in the past few years, remained high with slight decreases in 2025, and are currently expected to decrease further but stay relatively high in 2026. The combination of high interest rates and high levels of inflation reduces the affordability of mortgages and other financing options, and increases the cost of home improvement projects. Government trade actions, including tariffs imposed by the U.S. government and reciprocal tariffs from other nations, create significant uncertainty and could disrupt supply chains, increase costs for raw materials, and negatively impact business margins and financial results.

Management's message emphasizes the Company's position as a building products leader committed to building a sustainable future through material innovation. The strategic priorities emphasized for the period ahead include completing the divestiture of the global glass reinforcements business, which is expected to close in the first few months of 2026 and aligns with the strategy to reshape the Company to focus on building products in North America and Europe. Management also focuses on integrating the Masonite acquisition to strengthen the Company's position in building and construction and expanding its offering of branded residential building products. The Company expects general corporate expenses to be approximately $245 million to $255 million ²³ in 2026 and capital expenditures of approximately $800 million ²⁴ in 2026.

Net sales from continuing operations were $10,103 million ²⁵ in 2025, compared to $9,851 million ²⁶ in 2024. Net loss from continuing operations attributable to Owens Corning was $188 million ²⁷ in 2025, compared to net earnings of $947 million ²⁸ in 2024. Diluted loss per share from continuing operations was $2.24 ²⁹ in 2025, compared to diluted earnings per share of $10.79 ³⁰ in 2024. Gross margin was $2,838 million ³¹ in 2025, or 28% ³² of net sales, compared to $3,041 million ³³, or 31% ³⁴ of net sales in 2024. Operating income was $360 million ³⁵ in 2025, compared to $1,482 million ³⁶ in 2024. The decrease was primarily driven by a $1,135 million ³⁷ goodwill impairment charge and a $39 million ³⁸ intangible assets impairment charge. Adjusted EBITDA from continuing operations was $2,268 million ³⁹ in 2025, compared to $2,468 million ⁴⁰ in 2024. Net cash flow provided by operating activities was $1,786 million ⁴¹ in 2025. Cash and cash equivalents from continuing operations were $345 million ⁴² as of December 31, 2025. Total debt was approximately $5.2 billion ⁴³ as of December 31, 2025. The Roofing segment reported EBITDA of $1,411 million ⁴⁴ in 2025, compared to $1,532 million ⁴⁵ in 2024. The Insulation segment reported EBITDA of $848 million ⁴⁶ in 2025, compared to $945 million ⁴⁷ in 2024. The Doors segment reported EBITDA of $232 million ⁴⁸ in 2025, flat compared to $232 million ⁴⁹ in 2024.

Low levels of residential or non-residential construction activity have a material adverse impact on the business, as a large portion of products are used in these markets. The Company faces significant exposure to raw material cost increases and availability constraints, with one raw material sourced from a sole supplier and asphalt supply occasionally constricted. Customer concentration is a material risk, as two customers represented 16% ¹⁹ and 12% ²⁰ of annual net sales in 2025. The Company recorded $1,135 million ²¹ in pre-tax non-cash goodwill impairment charges in 2025 for the Doors reporting unit, and the remaining goodwill balance of $380 million ²² for that unit continues to be at risk for future impairment. Government trade actions, including tariffs, create significant uncertainty and could disrupt supply chains, increase costs, and negatively impact demand.