USG Corporation Reports First Quarter 2017 Results
USG Corporation (NYSE:USG), an industry leading manufacturer of building products and innovative solutions, today reported results for the first quarter of 2017.
First Quarter 2017 vs. First Quarter 2016
- Net sales increase to $767 million from $747 million
- Net income decreases to $55 million from $67 million; adjusted net income decreases to $55 million from $56 million
- Earnings per diluted share decreases to $0.37 from $0.46; adjusted earnings per diluted share decreases to $0.37 from $0.38
- Repurchased approximately $25 million of common stock
“We had sound operational performance in the first quarter and we are seeing solid demand for our products,” said Jennifer F. Scanlon, President and CEO. “I am encouraged about our prospects for the balance of the year, despite the uptick we are seeing in commodity costs.”
On a consolidated basis in the first quarter of 2017, net sales were $767 million, compared to $747 million in the first quarter of 2016. Operating profit decreased to $91 million from $116 million, while adjusted operating profit decreased to $104 million from $120 million in the first quarter of 2017 compared to the first quarter of 2016. Inflation in commodity costs across both the Gypsum and Ceilings businesses was the primarily driver of the decrease in consolidated operating profit in the first quarter of 2017.
USG generated $55 million in net income and $0.37 per diluted share in the first quarter of 2017, compared to $67 million and $0.46per diluted share in the first quarter of 2016. On an adjusted basis, net income of $55 million and diluted earnings per share of $0.37 in the first quarter of 2017 decreased from $56 million and $0.38, respectively, in the first quarter of 2016. A full reconciliation of GAAP to adjusted metrics is set forth on an attached schedule.
The corporation’s Gypsum segment generated $91 million of operating profit in the first quarter of 2017. On an adjusted basis, operating profit of $91 million in the Gypsum segment decreased by $15 million over the first quarter of 2016. US wallboard price increased by 5%, while US wallboard volumes decreased by 4% in the first quarter of 2017. US wallboard manufacturing costs increased by $16 million due primarily to recent inflation in waste paper and synthetic gypsum input costs.
The Ceilings segment earned $23 million of operating profit in the first quarter of 2017 compared to $28 million in operating profit in the first quarter of 2016. The reduction in operating profit was driven primarily by increased tile and grid manufacturing costs on normalizing steel input costs, coupled with lower volumes in the US.
The USG Boral business generated $13 million of equity income in the first quarter of 2017, an increase of $6 million from the first quarter of 2016, on a 16% increase in plasterboard volumes as well as improved plasterboard price and increased sales of adjacent products.
“Our residential and commercial construction end markets are healthy and growing,” Ms. Scanlon said. “With innovative new product offerings, such as the Sheetrock® Brand EcoSmart Panels that we announced in March, we are well positioned for success in 2017.”
The full text of USG’s 1Q17 earnings release, including all tables, and a replay of the company’s Apr. 27 conference call webcast, including presentation materials, may be accessed on the USG website, www.usg.com, in the Investor Relations section. In addition, a telephonic replay of the call will be available until Friday, May 26, 2017. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 44622363.
USG Corporation is an industry-leading manufacturer of building products and innovative solutions. Headquartered in Chicago, USG serves construction markets around the world through its United States Gypsum Company and USG Interiors, LLC subsidiaries and its international subsidiaries, including its USG Boral Building Products joint venture. Its wall, ceiling, flooring, sheathing and roofing products provide the solutions that enable customers to build the outstanding spaces where people live, work and play. Its USG Boral Building Products joint venture is a leading plasterboard and ceilings producer across Asia, Australasia and the Middle East. For additional information, visit www.usg.com.