TOLEDO, Ohio (AP) — Construction and industrial-materials company Owens Corning returned to a profit in its fourth quarter, helped by an insurance gain tied to Hurricane Sandy and lower charges.
Its adjusted earnings easily topped Wall Street's view, and revenue beat expectations as well. Owens Corning also initiated a quarterly dividend.
The stock surged in Wednesday morning trading.
Owens Corning anticipates its roofing business will have a strong year in 2014. It foresees the market growing on new construction with flat to potentially improving re-roofing demand. The company's insulation business is expected to continue to benefit from growth in new residential construction in the U.S., higher prices and operating leverage.
It also expects recovering market conditions to help push prices higher for its composites segment.
The company earned $82 million, or 69 cents per share, for the three months ended Dec. 31. That compares with a loss of $56 million, or 47 cents per share, a year ago.
The current quarter included a $31 million gain related to Hurricane Sandy insurance activity. Charges tied to cost-cutting efforts and related items dropped to $3 million from $27 million.
Adjusted earnings were 44 cents per share. Analysts predicted earnings of 27 cents per share, according to a FactSet survey.
Revenue rose 10 percent to $1.28 billion from $1.16 billion, topping Wall Street's estimate of $1.2 billion.
Revenue for the building materials unit, which includes insulation and roofing, increased to $847 million from $763 million. Composites revenue rose to $461 million from $426 million.
For the year, Owens Corning earnings $204 million, or $1.71 per share. In the previous year it lost $19 million, or 16 cents per share. Annual revenue rose 3 percent to $5.3 billion from $5.17 billion.
The company initiated a quarterly dividend of 16 cents per share. The dividend will be paid on April 3 to shareholders of record on March 14.
Shares of Owens Corning rose $5.17, or 13 percent, to $44.91 in morning trading. Over the past year, the stock is up 3 percent.