USG 2Q Loss Widens On Charges, Weak Sales;Results Miss Views

   DOW JONES NEWSWIRES 
 

USG Corp.'s (USG) second-quarter loss widened, missing expectations, on charges and weak sales across all its divisions as the housing market remains weak.

Home builders and suppliers continue to suffer during the global recession as foreclosures and inventories mount, home prices keep declining and lending standards remain extremely tight. Little hope of relief is seen this year.

Shares were recently down 5.9% at $11.40 in premarket trading.

Chairman and Chief Executive William Foote said revenue in all segments was under pressure because of "significant declines in residential and commercial construction activity in the U.S. and abroad."

He added in the U.S., the company's largest markets - new residential and home repair and modeling - seem to be stabilizing, while the commercial market is still declining.

The company posted a loss of $53 million, or 53 cents a share, compared with a year-earlier loss of $37 million, or 37 cents a share. The results included 12 cents a share in the latest quarter and 13 cents last year in restructuring charges and write-downs.

Revenue decreased 34% to $829 million.

Analysts surveyed by Thomson Reuters expected a loss of 37 cents a share on revenue of $956 million.

Gross margin rose to 6.2% from 6.1%.

Losses in the North American gypsum business narrowed as sales slid 29% amid restructuring charges. The L&W Supply building unit's sales fell 38% as the unit swung to a loss, while the worldwide ceiling segment's sales fell 27% as operating profit dropped 40%.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; [e-mail]