Owens Corning's Launch of Duration FLEX Aids Roofing Business

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Owens Corning 's OC Roofing business has launched TruDefinition Duration FLEX shingles, an exclusive blend of SBS polymer modified asphalt, in Nashville, TN.

Duration FLEX shingles, which are fortified with SureNail Technology, provide greater durability and toughness to guard homes. The shingles are manufactured with the highest impact test standard available, UL 2218 Class 4.

These shingles are designed in such a way that they deliver improved flexibility and superior performance in harsh weather conditions. These are flexible like a rubber, offering more than 10% stronger tear strength along with a clean and finished look, which help resist expansion and contraction stresses, as well as protect themselves from UV rays.

Additionally, these have 42% better nail pull-resistance against wind than standard shingles.

Owens Corning's Roofing segment is the second largest producer of asphalt roofing shingles in the United States. It provides laminated and striped asphalt roofing shingles. The segment's revenues are mostly driven by residential repair and remodeling, as well as new construction activity.

The segment focuses on continuous innovation and product design, along with maintaining its proximity to customers, quality and price.

Notably, in the third quarter, Owens Corning delivered 7% top-line growth, backed by robust pricing actions in Roofing and Insulation businesses, along with Insulation acquisitions. Also, adjusted EBIT margin grew 70 basis points year over year, given strong pricing actions. In fact, during the quarter, pricing outpaced inflation for the first time in 2018. The company expects double-digit operating margins for all the three businesses in 2018.

However, sales in the Roofing segment declined 5% year over year in the third quarter of 2018 due to 15% lower shingle volumes. Unfavorable geographic mix is impacting its volumes over the last few quarters and is likely to remain a headwind in the near term as well. Consequently, the company has lowered its full-year 2018 revenue guidance by 10% for the Roofing business.

Nonetheless, product innovations like the recent one are likely to aid the company to generate higher sales in the upcoming quarters.

Share Price Performance

Shares of Owens Corning have outperformed its industry in the past three months. Its shares have gained 10.2% compared with its industry's growth of 2.7% in the said period.

Zacks Rank & Key Picks

Currently, Owens Corning carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Construction sector include Gibraltar Industries, Inc. ROCK , Comfort Systems USA, Inc. FIX and Gates Industrial Corporation plc GTES , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Gibraltar's 2019 earnings are expected to increase 17.2%.

Comfort Systems' earnings for the current quarter are likely to grow 84.5%.

Gates Industrial's earnings are projected to grow 9.7% in 2019.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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