Owens Corning (NYSE:OC) Q3 2018 Earnings Conference Call Transcript
Oct 24, 2018 • 11:00 am ET
Good morning, and welcome to the Owens Corning Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Thierry Denis, Vice President of Investor Relations. Please go ahead.
Thierry J. Denis
Thank you, Andrea. Good morning, everyone. Thank you for taking the time to join us for today's conference call in review of our business results for the third quarter 2018. Joining us today are Mike Thaman, Owens Corning's Chairman and CEO and Michael McMurray, CFO. Following our presentation this morning, we will open this one-hour call to your questions. In order to accommodate as many call participants as possible please limit yourself to one question only.
Earlier this morning, we issued a news release and filed a 10-Q that detailed our financial results for the third quarter 2018. For the purposes of our discussion today, we have prepared presentation slides that summarize our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, Form 10-Q and the presentation slides at our website, owenscorning.com. Refer to the Investors link under the Corporate section of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference.
(Forward-Looking Cautionary Statements)
Adjusted EBIT is our primary measure of period-over-period comparisons, and we believe it is a meaningful measure for investors to compare our results from period to period. Consistent with our historical practice, we have excluded certain items that we believe are not representative of our ongoing operations when calculating adjusted EBIT and adjusted earnings. We adjust our effective tax rate to remove the effect of quarter-to-quarter fluctuations, which have the potential to be significant in arriving at adjusted earnings and adjusted earnings per share.
We also use free cash flow and free cash flow conversion of adjusted earnings as measures helpful to investors to evaluate the company's ability to generate cash and utilize that cash to pursue opportunities that enhance shareholder value. For those of you following along with our slide presentation, we will begin on Slide four. And now opening remarks from our Chairman and CEO, Mike Thaman, will be followed by CFO, Michael McMurray, and our Q&A session. Mike?
Thank you, Thierry. Good morning, everyone. In the third quarter, we generated 7% revenue growth and 12% adjusted EBIT growth. Adjusted EBIT grew to $267 million, an all-time record quarter despite lower market volumes and persistent inflation. Overall, we executed well in the quarter, with better operating performance, solid market share positions and strong price realization.
However, despite the progress, we're not where we expected to be. Inflation has persisted and volume has slowed, both of which we expect will continue through the remainder of the year. As a result, we've lowered our 2018 outlook. We expect adjusted EBIT to