Owens Corning (NYSE:OC) reported lower first-quarter revenue as weaker residential construction and repair-and-remodel demand continued to pressure volumes, but executives said the company’s reshaped building products portfolio is producing more durable margins through the cycle.
The Toledo, Ohio-based company generated first-quarter revenue of $2.3 billion, down 10% year over year, and adjusted EBITDA of $369 million, representing a 16% adjusted EBITDA margin. Adjusted earnings were $1.22 per diluted share. Chair and Chief Executive Officer Brian Chambers said the results reflected “strong operating performance” despite affordability challenges, consumer uncertainty and limited storm-related carryover demand from the second half of last year.
“For the past several quarters, we’ve been operating through markets with declining volumes, but our ability to consistently deliver solid results highlights the strength of our enterprise and the structural improvements we’ve made,” Chambers said.
The company returned $63 million to shareholders through dividends during the quarter and reiterated its commitment to return $1 billion to shareholders in 2026 through dividends and share repurchases. Chief Financial and Operating Officer Todd Fister said Owens Corning did not repurchase shares in the first quarter because of seasonal working capital needs.
Roofing Margins Hold Despite Lower Volumes
Roofing sales were $960 million, down 14% from the prior year, primarily because of lower volumes. Fister said the U.S. asphalt shingle market declined about 10% year over year, driven by lower storm-related carryover demand and severe weather in parts of the country. He added that the market was stronger than expected because of restocking activity late in the quarter.
Roofing adjusted EBITDA was $231 million, down from last year, with a 24% margin. The business absorbed roughly $30 million of curtailment costs carried over into the quarter, about half of which was offset by productivity gains. Fister said modest inflation outside asphalt and slightly lower pricing resulted in negative price-cost performance.
During the question-and-answer session, Chambers said first-quarter upside in Roofing was “primarily volume driven,” with additional support from stronger manufacturing productivity. He said Owens Corning’s Roofing volumes slightly underperformed the broader market in the quarter partly because of its retail mix, since retail customers generally do not participate in restocking activity to the same degree as wholesale distribution.
Looking ahead, Chambers said the company expects second-quarter Roofing revenue to decline in the low- to mid-single digits from the prior year. He said the company expects its shingle volumes to outperform the market in the quarter, supported by its customer mix and contractor engagement model. Roofing EBITDA margins are expected to be in the low 30% range.
Insulation Sees Stable Performance in Mixed Markets
Insulation sales were $867 million in the first quarter, down 5% year over year. Fister said North American residential volumes declined as expected because of the housing market, while North American non-residential revenue was flat from the prior year. In Europe, the company saw stable markets and benefited from currency.
Adjusted EBITDA in Insulation was $167 million, down $58 million from the prior year, with a 19% margin. Fister said the business remained disciplined on inventory management, which led to incremental production downtime versus last year. He also cited targeted price moves and additional inflation.
In response to an analyst question, Fister said North American residential conditions were “pretty stable” and noted that the company expects benefits from March housing starts to begin showing up late in the second quarter. In non-residential markets, he cited strength tied to AI data centers and reindustrialization in North America. In Europe, he said some regions were stronger while Germany remained weaker.
For the second quarter, Owens Corning expects Insulation revenue to decline in the low single digits, including the impact of the sale of its building materials business in China, which closed in mid-2025. EBITDA margins are expected to be approximately 20%.
Doors Business Remains Under Pressure
Doors sales were $475 million, down 12% year over year, reflecting lower market volumes and the impact of recent strategic actions. Fister said the company divested its distribution business late in the first quarter, which had net annual revenue of about $70 million, and sold its Oregon components facility in the fourth quarter of last year, which had annual sales of about $50 million. The combined net revenue impact of those actions was approximately $24 million in the first quarter.
Doors EBITDA was $34 million, representing a 7% margin, in line with fourth-quarter margins. Chambers said Owens Corning is applying the commercial and operating playbook used in Roofing and Insulation to the Doors business, including an integrated go-to-market strategy and cost optimization efforts.
For the second quarter, the company expects Doors revenue to decline in the mid-single digits from the prior year, primarily due to recent divestitures. EBITDA margin is expected to improve sequentially to the high single digits.
Portfolio Reshaping and Cost Actions
Chambers said Owens Corning has completed the reshaping of its portfolio following the sale of its Glass Reinforcements business. The company expects approximately $280 million in cash proceeds from the transaction and an additional $50 million to $70 million from excess alloy sales over the next year.
The company said it is on track to achieve approximately $135 million in run-rate enterprise cost synergies by midyear, exceeding a prior $125 million commitment. It is also pursuing an additional $75 million of structural cost improvements within its operations.
Fister said those efforts are focused on productivity across operations, sourcing and supply chain, as well as efficiency improvements in Doors. “We still have room to go on these, but we are seeing a lot of the benefit of the self-help come through,” he said.
Owens Corning also reported a first-quarter recordable incident rate of 0.46, with nearly 85% of sites operating recordable injury-free.
Second-Quarter Outlook and Inflation Pressures
For the second quarter, Owens Corning expects enterprise revenue of approximately $2.6 billion to $2.7 billion, slightly below the prior year, and adjusted EBITDA margin of approximately 20% to 22%.
Management said discretionary remodel activity and U.S. residential new construction are expected to remain under pressure. Non-discretionary reroof demand is expected to remain solid but slightly down from the prior year absent major storm activity, while North American non-residential construction is expected to remain stable. Europe is expected to see a gradual market recovery.
Fister said the company saw about $13 million of net tariff impact in the first quarter. He also said Owens Corning may be eligible for approximately $50 million in tariff refunds following a recent Supreme Court ruling, with about $25 million already submitted. Those refunds are not included in the company’s outlook.
The company also expects approximately $60 million of second-quarter costs associated with inflation stemming from the conflict in Iran, with about half affecting Roofing and the remainder split between Insulation and Doors. Fister said price increases and fuel surcharges may offset some inflation over time, but with a lag.
Chambers said the company remains focused on operational discipline, customer relationships and long-term growth opportunities tied to housing and energy efficiency. “We feel very good about how the year’s starting out,” he said in response to an analyst question, adding that the first-half performance is consistent with the company’s prior expectations.
About Owens Corning (NYSE:OC)
Owens Corning is a global leader in composite materials and building products, with a primary focus on insulation, roofing, and fiberglass composites. The company serves professional contractors, builders and industrial manufacturers by providing solutions designed to improve energy efficiency, structural performance and durability. Its products are used in residential, commercial, and industrial applications worldwide.
The company's core product lines include fiberglass insulation for thermal and acoustic comfort, roofing shingles and underlayment systems engineered for weather protection, and advanced composite materials for markets such as wind energy, automotive, marine and infrastructure.
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