Credit Bubble Stocks is 5/5: USG Corp (USG) Earnings Weren't Good Either!

With today's disappointing USG Corp (USG) earnings, Credit Bubble Stocks has gone 5/5 on this earnings season.

For third quarter 2010, USG reported net sales of $758 million, down 8% from the year ago quarter. 

“Our third quarter results reflect continued weak market conditions and extraordinarily low shipping volumes,” said William C. Foote, Chairman and CEO. 

USG's third quarter EBITDDAR for the third quarter and first nine months of 2010 was $51 million and $51 million, respectively. The company is not nearly profitable enough to cover its interest expense, which was $45 million and $134 million for the third quarter and first nine months of 2010, respectively. Total debt amounted to $1.959 billion as of Sept. 30, 2010

I think the difference between me and the bulls is they think we just finished a garden variety recession and are now embarking on another wave of expansion that will last for years. So, USG will start selling drywall like hotcakes when we are building 2 million new houses a year in 2012.

In contrast, one of my investing themes is that the 2009-2010 period of inventory restocking is going to be a high-water mark for economically sensitive businesses.