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SEC filingOwens Corning's Q1 2026 net earnings dropped 85% to $38M, driven by lower volumes across all segments and elevated restructuring costs.
Owens Corning's first quarter of 2026 reflected a challenging operating environment, with net sales declining 10.5% year-over-year to $2.265 billion. The decrease was broad-based, driven by lower volumes across all three segments: Roofing volumes down 14%, Insulation down 3%, and Doors down 12%. Selling price reductions in Roofing and Insulation further pressured revenue, partially offset by favorable mix in each segment. Gross margin contracted sharply from 29% to 23%, as lower volumes, price concessions, production downtime, and input cost inflation combined to reduce gross profit by $215 million. Marketing and administrative expenses remained relatively flat at $258 million. Other expense surged $73 million to $95 million, primarily due to a $43 million increase in restructuring costs and a $31 million rise in the Paroc marine recall liability. Net earnings from continuing operations attributable to Owens Corning plummeted 85.1% to $38 million, as operating income fell 70.5% to $120 million. Adjusted EBITDA declined 34.7% to $369 million, reflecting the broad operational headwinds.
All three segments experienced year-over-year EBITDA declines. Roofing segment EBITDA decreased $101 million to $231 million, with margins compressing from 30% to 24% due to lower volumes, a $17 million increase in manufacturing costs, $13 million in lower selling prices, $6 million of input cost inflation, and production downtime. Insulation EBITDA fell $58 million to $167 million, with margins dropping from 25% to 19%, driven by $21 million lower selling prices, $20 million of production downtime impact, $11 million input cost inflation, and lower volumes, partially offset by favorable mix and a $25 million favorable currency translation. Doors segment EBITDA decreased $34 million to $34 million, with margins declining from 13% to 7%, as lower volumes, $10 million input cost inflation, $9 million higher manufacturing costs, and production downtime were partly offset by $9 million lower SG&A and favorable mix. Corporate, Other and Eliminations EBITDA swung to a loss of $138 million from a loss of $59 million, driven by higher restructuring costs and increased Paroc recall liabilities.
Management's outlook remains cautious. Roofing expects non-discretionary replacement demand to remain solid but faces uncertainties from weather, competition, and raw material costs. Insulation anticipates near-term challenges in North American new residential construction due to affordability and consumer uncertainty, while global non-residential markets are expected stable. Doors also sees headwinds in residential new construction and soft discretionary repair/remodeling. General corporate expenses are forecasted between $245 million and $255 million for 2026. The company is focusing on cost management, productivity, and capital discipline. The Glass Reinforcements divestiture completed in April 2026 aligns with strategic refocus on building products. Tariff uncertainties persist, with potential refund of $50 million in tariffs, though not yet recorded.
Cash and cash equivalents decreased from $345M to $272M during Q1 2026. Total debt increased by $335M to $5,507M, primarily due to $330M in commercial paper issuances. The current portion of long-term debt remained stable at $438M. Shareholders' equity fell to $3,644M from $3,853M, driven by net loss and dividend payments.
No purchase commitments were disclosed in the Notes. Contract liability (deferred revenue) from extended warranties and deposits stood at $133M, unchanged from year-end. The company also notes a potential $50M tariff refund, not yet recognized.
Buybacks: $22M spent on treasury stock purchases, representing 0.2M shares. Authorizations remain at 12.5M shares. Dividends: $0.79 per share quarterly, up from $0.69, totaling $65M. Debt: Net increase of $335M from commercial paper activity. Capex: $210M invested in property, plant and equipment, 9.3% of net sales, down from 7.2% in Q1 2025 when excluding discontinued ops.
Roofing revenue fell 14.3% YoY to $960M, with EBITDA down 30.4% to $231M. Insulation revenue declined 4.6% to $867M, EBITDA down 25.8% to $167M. Doors revenue decreased 12.0% to $475M, EBITDA down 50% to $34M. North America remains the dominant region, accounting for 87% of consolidated net sales.