Commodity Costs Hurt USG’s 1Q Margins, but We Still See a Bright Outlook for the Company
USG shares closed down about 6% on April 27, after the no-moat wallboard and ceiling tile manufacturer reported first-quarter earnings that missed the consensus estimate ($0.37 versus $0.45 consensus). Although USG posted solid 3% sales growth on wallboard price improvement and strengthening end markets, the company was hit with higher commodity costs, which more than offset pricing gains, and consolidated adjusted operating margin contracted 250 basis points to 13.6%. Management noted, however,...USG is a manufacturer of building materials and solutions. The company's segments are: Gypsum, which manufactures and markets gypsum and related products primary used in a variety of building applications; Performance Materials, which manufactures and markets products used in a variety of interior and exterior building applications of residential, nonresidential buildings and industrial; Ceilings, which manufactures and markets ceiling interior systems products including ceiling tile, ceiling grid, and specialty ceilings; and USG Boral Building Products, which manufactures and distributes products for wall, ceiling, floor lining and exterior systems that utilize gypsum wallboard.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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