Owens Corning 2025 Q1 Earnings Revenue Grows 25% Despite Net Income Decline

Owens Corning (OC) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company achieved a 25% year-over-year growth in first-quarter net sales to $2.53 billion, surpassing the consensus of $2.51 billion. However, the firm experienced a notable drop in earnings per share and net income, reflecting external challenges impacting profitability. Owens Corning remains optimistic about its strategic direction, expecting to bolster long-term growth through capital-efficient investments while maintaining improved EBITDA margins. The company plans to share further insights on its strategy during the upcoming Investor Day.

Revenue
Owens Corning's total revenue for Q1 2025 was $2.53 billion, showing a significant increase from the previous year's $2.02 billion. The roofing segment contributed $1.12 billion, marking a 2% growth from last year, while the insulation segment saw a decrease, bringing in $909 million. The doors segment, a new addition, contributed $540 million, reflecting the company's recent acquisition efforts. With eliminations amounting to $39 million, the consolidated revenue stood firm at $2.53 billion.

Earnings/Net Income
Owens Corning reported a loss of $1.08 per share in Q1 2025, a stark contrast to the $3.42 profit per share in Q1 2024, representing a 131.6% negative shift. The net loss amounted to $93 million, a significant decline from the net income of $298 million in the previous year. The EPS results reflect challenging business conditions and are notably weaker compared to the prior year.

Price Action
The stock price of Owens Corning fell by 6.61% during the most recent trading day, tumbled 10.32% over the past week, and decreased 2.79% month-to-date.

Post Earnings Price Action Review
The strategy of buying Owens Corning shares following a revenue drop quarter-over-quarter and holding for 30 days has historically led to poor performance over the past five years. This approach yielded a return of -8.08%, which significantly lagged behind the benchmark return of 84.08%. The strategy's excess return was a substantial -92.17%, with a compound annual growth rate (CAGR) of -1.68%, indicating considerable losses. Moreover, the strategy experienced a high maximum drawdown of -24.87% and had a Sharpe ratio of -0.13, highlighting the significant risk and negative returns associated with this trading approach.

CEO Commentary
Owens Corning delivered strong revenue growth and margin performance in the first quarter, achieving a 25% increase in net sales to $2.53 billion, driven by the acquisition of the Doors business, which contributed $540 million. Despite external challenges, the company maintained strong earnings with a 10% net earnings margin and a 22% adjusted EBITDA margin, marking the 19th consecutive quarter of 20% or better adjusted EBITDA margins. CEO Brian Chambers emphasized the durability of earnings and the effectiveness of the company’s strategic changes, and he expressed optimism about sharing the long-term strategy at the upcoming Investor Day.

Guidance
Owens Corning expects solid near-term demand for nondiscretionary repair activity through the second quarter, although residential new construction and remodeling are anticipated to remain soft. Additionally, non-residential construction activity in North America is beginning to face challenges. The company will focus on capital-efficient investments to strengthen market positions and drive long-term growth while sustaining improved EBITDA margins and returning cash to shareholders.

Additional News
Owens Corning announced that its planned sale of the glass reinforcements unit remains on track for 2025, emphasizing its focus on building products. This business has been classified as discontinued, with reportable segments now organized into roofing, insulation, and doors. During the first quarter, the company returned $159 million to shareholders through dividends and share buybacks, with $59 million paid in dividends and $100 million allocated to share repurchases. Additionally, Owens Corning will hold its 2025 Investor Day on May 14, where CEO Brian Chambers and CFO Todd Fister will discuss the company's long-term strategy and financial goals through 2028.