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Louisiana-Pacific (LPX) Misses Earnings and Sales in Q3
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Louisiana-Pacific Corporation (LPX - Free Report) reported adjusted earnings per share of 32 cents in the third quarter of 2016, missing the Zacks Consensus Estimate of 39 cents by 17.95%.
Net sales of $596 million in the quarter missed the Zacks Consensus Estimate of $608 million by 1.97%. However, net sales increased 28% year over year, as revenue increased across all segments.
Adjusted EBITDA from continuing operations was $111 million in the quarter compared with $11 million in the prior-year quarter.
Segmental Analysis
Oriented Strand Board (“OSB”): Sales at the OSB segment increased 41% year over year to $282 million.
For the third quarter of 2016, adjusted EBITDA from continuing operations was $83 million compared with $4 million in the third quarter of 2015.
Sales volumes were up 5% and sales pricing rose by 36%, driving operating results by $75 million.
Siding Segment: The segment manufactures products under two categories: SmartSide siding products and related accessories, and CanExel siding and other related accessories. These products are used for new constructions, repair and remodeling and outdoor structures such as shed. The Siding segment also produces a small amount of OSB products.
Sales at the segment increased 23.4% year over year to $195 million on the back of an increase in volumes of SmartSide. Notably, SmartSide volumes improved 25% while sales price in SmartSide was up 1%, owing to changes in product mix, with individual prices remaining relatively flat.
During the quarter, the Siding segment recorded adjusted EBITDA of $42 million, higher than $22 million reported in the prior-year quarter.
Engineered Wood Products (“EWP”): The EWP segment makes I-Joists, laminated veneer lumber (LVL), laminated strand lumber (LSL) and other related products. These products are used in residential and commercial flooring and roofing systems.
Engineered Wood Products sales surged 8% year over year to $81 million in the quarter. Volumes of IJ increased 1%, while both LVL and LSL volumes were up 9%.
Pricing increased 2% in LVL, LSL and I-Joists. Adjusted EBITDA from continuing operations improved by $1 million.
South America: Segment sales increased 18.5% year over year to $32 million. Volumes declined 3% in Chile and 9% in Brazil. However, on a U.S. dollar basis, pricing was up 13% in Chile and 10% in Brazil. Adjusted EBITDA of $6 million was $2 million higher compared to the third quarter of 2015.
Louisiana-Pacific expects housing starts, particularly single family, should continue to grow over the next several years.
The company's transaction with Norbord will likely boost flexibility to add future siding capacity. Further, continued focus on value-added products will enhance over-the-cycle margins.
The company projected capital expenditures in the $115 million to $125 million range for 2016. For 2017, it is planning to spend approximately $140 million of capital. This includes $40 million for South American operations and excludes any capital to convert or build a new Siding mill.
For 2017, the company expects demand for housing to increase, driven primarily by increased household formations and wage growth. However, because of numerous constraints, labor, adequate lots, regulatory cost and timing, the growth rate in housing is expected to be between 5% and 10%.
Vulcan Materials Company (VMC - Free Report) is slated to release third-quarter results on Nov 2. The Zacks Consensus Estimate for earnings is pegged at $1.12 cents.
DR Horton Inc. (DHI - Free Report) is scheduled to report third-quarter results on Nov 8. The Zacks Consensus Estimate for earnings is pegged at 77 cents.
Toll Brothers Inc. (TOL - Free Report) is expected to release third-quarter numbers on Dec 13. The Zacks Consensus Estimate for the bottom line is pegged at 98 cents.
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Louisiana-Pacific (LPX) Misses Earnings and Sales in Q3
Louisiana-Pacific Corporation (LPX - Free Report) reported adjusted earnings per share of 32 cents in the third quarter of 2016, missing the Zacks Consensus Estimate of 39 cents by 17.95%.
Net sales of $596 million in the quarter missed the Zacks Consensus Estimate of $608 million by 1.97%. However, net sales increased 28% year over year, as revenue increased across all segments.
Adjusted EBITDA from continuing operations was $111 million in the quarter compared with $11 million in the prior-year quarter.
Segmental Analysis
Oriented Strand Board (“OSB”): Sales at the OSB segment increased 41% year over year to $282 million.
For the third quarter of 2016, adjusted EBITDA from continuing operations was $83 million compared with $4 million in the third quarter of 2015.
Sales volumes were up 5% and sales pricing rose by 36%, driving operating results by $75 million.
Siding Segment: The segment manufactures products under two categories: SmartSide siding products and related accessories, and CanExel siding and other related accessories. These products are used for new constructions, repair and remodeling and outdoor structures such as shed. The Siding segment also produces a small amount of OSB products.
Sales at the segment increased 23.4% year over year to $195 million on the back of an increase in volumes of SmartSide. Notably, SmartSide volumes improved 25% while sales price in SmartSide was up 1%, owing to changes in product mix, with individual prices remaining relatively flat.
During the quarter, the Siding segment recorded adjusted EBITDA of $42 million, higher than $22 million reported in the prior-year quarter.
Engineered Wood Products (“EWP”): The EWP segment makes I-Joists, laminated veneer lumber (LVL), laminated strand lumber (LSL) and other related products. These products are used in residential and commercial flooring and roofing systems.
Engineered Wood Products sales surged 8% year over year to $81 million in the quarter. Volumes of IJ increased 1%, while both LVL and LSL volumes were up 9%.
Pricing increased 2% in LVL, LSL and I-Joists. Adjusted EBITDA from continuing operations improved by $1 million.
South America: Segment sales increased 18.5% year over year to $32 million. Volumes declined 3% in Chile and 9% in Brazil. However, on a U.S. dollar basis, pricing was up 13% in Chile and 10% in Brazil. Adjusted EBITDA of $6 million was $2 million higher compared to the third quarter of 2015.
LOUISIANA PAC Price, Consensus and EPS Surprise
LOUISIANA PAC Price, Consensus and EPS Surprise | LOUISIANA PAC Quote
Outlook
Louisiana-Pacific expects housing starts, particularly single family, should continue to grow over the next several years.
The company's transaction with Norbord will likely boost flexibility to add future siding capacity. Further, continued focus on value-added products will enhance over-the-cycle margins.
The company projected capital expenditures in the $115 million to $125 million range for 2016. For 2017, it is planning to spend approximately $140 million of capital. This includes $40 million for South American operations and excludes any capital to convert or build a new Siding mill.
For 2017, the company expects demand for housing to increase, driven primarily by increased household formations and wage growth. However, because of numerous constraints, labor, adequate lots, regulatory cost and timing, the growth rate in housing is expected to be between 5% and 10%.
Louisiana-Pacific carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Vulcan Materials Company (VMC - Free Report) is slated to release third-quarter results on Nov 2. The Zacks Consensus Estimate for earnings is pegged at $1.12 cents.
DR Horton Inc. (DHI - Free Report) is scheduled to report third-quarter results on Nov 8. The Zacks Consensus Estimate for earnings is pegged at 77 cents.
Toll Brothers Inc. (TOL - Free Report) is expected to release third-quarter numbers on Dec 13. The Zacks Consensus Estimate for the bottom line is pegged at 98 cents.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>