DOW JONES NEWSWIRES
USG Corp.'s (USG) first-quarter loss widened slightly on
write-downs and amid a steep drop in revenue as the housing market,
a major source of the building materials maker's business, remains
weak, with little relief seen this year.
Home builders and suppliers continue to suffer amid the global
recession as foreclosures and inventories mount, home prices
decline and lending standards remain extremely tight.
Chief Executive William Foote said the company continues to make
progress toward profitability despite challenging market
conditions, helped by its cost-cutting actions last year, which
included cutting 20% of its work force in November, and by higher
prices for wallboard.
The company posted a net loss of $42 million, or 42 cents a
share, compared with a year-earlier net loss of $41 million, or 42
cents a share. The latest results include 7 cents a share in
write-downs.
Revenue decreased 28% to $864 million.
Analysts surveyed by Thomson Reuters expected a loss of 73 cents
a share on revenue of $952 million.
Gross margin rose to 5.6% from 3.9%.
Losses in the North America gypsum business narrowed on higher
wallboard margin and results at U.S. Gypsum Co. as sales slid 23%.
The L&W Supply building unit's sales dropped 28% on lower
wallboard shipments while the worldwide ceiling segment's sales
fell 19% as operating profit slid 25%.
Companies like USG are poised to benefit from proposed tax cuts
by the Obama administration, which would likely allow companies to
use tax losses to offset taxable U.S. profits earned in the past
five years.
Meanwhile, billionaire investor Warren Buffett's holding company
Berkshire Hathaway Inc. (BRKA) said in February it would hold a
34.6% stake in USG after the conversion of the $300 million notes
held by Berkshire. Berkshire is already the largest shareholder of
USG.
USG shares were inactive in premarket trading Tuesday, after
closing Monday at $9.53.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com