Apr. 21--USG Corp.'s long-battered shares spiked higher Tuesday, after the Chicago building-products concern reported first-quarter results that were less gloomy than investors had been expecting.

In New York Stock Exchange trading, USG shares traded up as much as 35 percent, and even after cooling by late afternoon were still up $2.21, or 23 percent, at $11.74.

As the nation's biggest maker of gypsum wallboard, USG rises and falls in concert with the housing industry: The housing sector's white-hot boom gave the company a record profit boom in the middle of the decade, with housing's implosion doing the same for USG earnings.

Experts had been expecting USG to report a per-share loss of 74 cents. But Tuesday morning, the company said its loss was $42 million, or 42 cents per diluted share, roughly the same as the year-ago quarter's loss of $41 million, or 42 cents a share.

On an operating basis, USG said, the operating loss of $42 million was 30 percent lower than the $60 million operating loss last year.

Sales dropped 26 percent, to $864 million from $1.17 billion in the year-ago quarter.

The company's repeated rounds of cost-cutting, including staff reductions and capacity reductions, have helped margins, observers noted.

"Although demand will probably remain weak in the near term," said Morningstar analyst Anthony Dayrit in a note to investors, "we believe the company will weather this downturn and be well positioned when it comes out from the downcycle."

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