Jan. 28--Chicago building-products maker USG Corp. reported a dramatically deeper preliminary fourth-quarter loss Wednesday, as weak industry conditions caused by the housing industry's nosedive combined with restructuring costs and other onetime charges.

In the latest quarter, USG's sales dropped 18 percent to $981 million from $1.20 billion a year earlier.

Burdened by assorted charges, however, the company's net loss widened significantly to $172 million, or $1.74 a share, from last year's net loss of $32 million, or 32 cents a share.

The latest quarter included a pretax $68 million, or 42 cents, in charges related to the restructuring moves USG has made in response to declining demand, as well as to the company's decision to write down the value of certain long-lived assets to reflect lower industry conditions.

USG emphasized that the fourth quarter results it turned in Wednesday aren't final: the company intends to take an accounting charge to write down the value of goodwill and other intangible items on its books (in contrast to the hard-asset writedowns already recorded) but it is still calculating details of that charge.

Such "goodwill" writedowns, which have grown more commonplace in recent quarters as the economy's decline reduces the carrying value of many types of corporate assets, are widely viewed by investors as a relatively benign book-keeping issue. USG said it has $226 million in intangibles left on its books, and said officials expect the writedown charge to cover "all or a substantial amount" of that amount.

As a maker of the gypsum-based wallboard used in residential and commercial buildings, USG's fortunes have historically tracked the state of the U.S. construction sector. It prospered during the housing boom of a few years ago, but the subsequent cyclical dropoff has hammered USG's results and promises to continue doing so for some time.

The housing market, the company said, "continues to be very weak, and is expected to remain very weak throughout 2009."

That weakness "could extend into 2010," the company added, "especially if the inventory of unsold homes remains at an historically high level and tight mortgage lending policies remain in place." Commercial-construction financing and the economic recession are also taking a toll, USG said, and wallboard-industry pricing is likely to weaken further in 2009.

"New residential construction, a key market for our wallboard business, is down about 75 percent from its high in 2005," obserced Chairman and Chief Executive Officer William C. Foote.

USG, he said, has "moved aggressively throughout the prolonged housing downturn to improve operating efficiencies, cut costs and lower our breakeven operating levels in our gypsum wallboard business. We are taking similar actions in our other businesses as the recession has spread to other parts of the U.S. and global economy."

jpmiller@tribune.com

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