Dallas, Texas 07/24/2015 (FINANCIALSTRENDS) – USG Corporation (NYSE:USG) clocked its 17 months high after posting an impressing second quarter on the earnings front having benefited from the ongoing rebound in the residential construction sector. Backed by billionaire investor Warren Buffett the construction magnet posted second-quarter earnings of 53 cents a share on a profit of $79 million that beat Wall Street estimates of 46 cents a share.
High Housing Stats
The Chicago-based company benefitted from housing stats for the month of June rising to a high of 1.17 million annualized rate believed to be the second-highest level since 2007. Volumes for the wall producing North American Gypsum unit were also high in the quarter. Higher margin products for the callings division also had an impact on the overall results.
Second quarter revenues came in at $970 million slightly lower than the consensus estimate of $998.7 million. CEO, James Metcalf in a statement said that all the businesses in the company generated expanded profit margins USG Corporation (NYSE:USG) having posted its highest level of net income since the fourth quarter of 2006.
Key Segment Performance
The Gypsum unit posted an operating profit of $98 million for the quarter with the business registering a 310 basis points improvement in its operating margins. The Unit benefited from favorable pricing as well as improved volumes to generate the massive profit. Wallboard business unit generated an improved operating profit of $14 million with the substrate business generating an operating profit of $9 million.
Gypsum segment having generated it strongest operating profit in over eight years, Metcalf reiterated that USG Corporation (NYSE:USG) focus shifts to expanding margins as well as growing the non-wallboard portfolio of products. Focus also shifts to strengthening core operations as well as diversifying the company’s earnings base through differentiating innovation.
USG Corporation (NYSE:USG) did confirm that it received a federal grand jury subpoena that requires it to hand over records with regards to it gypsum drywall industry. The company does not expect the investigations to result any material adverse effects.