USG Corp. posts second quarter results
Net sales increased $29 million while net earnings declined $17 million compared with the second quarter of last year. While sales increased, profitability was hurt by higher costs related to energy, raw materials, employee benefits and insurance premiums. Diluted earnings per share for the second quarter of 2003 were $0.73 compared with $1.11 in the same period a year ago.
Net sales for the first six months of 2003 were $1,776 million versus net sales of $1,714 million for the same period in 2002. USG reported net earnings of $37 million for the first six months of this year compared with a net loss of $22 million for the same period last year.
USG's North American gypsum business recorded net sales of $566 million and operating profit of $47 million. Net sales increased by $15 million while operating profit declined $34 million compared to the second quarter of 2002.
United States Gypsum Co. (U.S. Gypsum) recorded second quarter 2003 net sales of $512 million and operating profit of $36 million, an increase of $9 million and a decline of $32 million, respectively, compared with the second quarter of 2002. Most of the decline in U.S. Gypsum's operating profit came from higher manufacturing costs and lower realized prices for the company's SHEETROCK Brand gypsum wallboard. The increased cost of production was primarily due to higher natural gas and waste paper prices, according to USG Corp.
During the second quarter, U.S. Gypsum continued to grow sales of its complementary products and achieved record second quarter shipments of SHEETROCK Brand joint compounds, DUROCK Brand cement board products and FIBEROCK Brand gypsum fiber panels. Despite this growth, profitability of complementary products in the second quarter declined versus last year's second quarter primarily due to higher material costs.
USG International reported an operating profit of $1 million, compared to an operating loss of $2 million in last year's second quarter. Despite lower sales in the quarter, profitability improved due to steps the company took to downsize its European ceilings business in the fourth quarter of last year. The ceilings division of CGC Inc. reported an operating profit of $1 million compared to $2 million in last year's second quarter. Increased manufacturing costs more than offset the benefit of the stronger Canadian dollar.
L&W Supply, USG's building products distribution business, reported second quarter 2003 net sales of $325 million and operating profit of $16 million. Sales and operating profit increased $19 million and $3 million, respectively, over the second quarter of 2002. The higher sales and profit primarily reflect increased shipments of gypsum wallboard, improved operating efficiencies and increased sales of complementary building products, primarily drywall metal, joint treatment, ceiling products and roofing. L&W's wallboard shipments set a quarterly record for the company.