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Louisiana-Pacific (LPX) Up 21.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Louisiana-Pacific (LPX - Free Report) . Shares have added about 21.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Louisiana-Pacific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Louisiana-Pacific Corporation reported impressive results for fourth-quarter 2020, wherein the top and the bottom line surpassed the Zacks Consensus Estimate. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing and favorable wood fiber and resin costs. Operational efficiency and cost-containment efforts also supported its performance.
Detailed Discussion
Louisiana-Pacific reported fourth-quarter adjusted earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.84 by 9.2%. The metric also increased significantly from the year-ago reported figure of 5 cents per share.
Net sales of $860 million topped the consensus estimate of $790 million by 8.9% and increased 60.1% from the year-ago period. The upside was driven by 30% SmartSide revenue growth and a $246-million increase in Oriented Strand Board or OSB prices. Notably, revenues for LP South America increased $12 million from the prior-year quarter.
Segmental Analysis
Siding: The segment’s sales of $259 million were up 16.7% from the prior-year period. The upside was due to a 30% increase in SmartSide revenues owing to 26% higher volume and 4% uptick in prices.
Adjusted EBITDA margin improved 1,120 basis points (bps) from the prior-year quarter to 29.7%. The upside was backed by higher SmartSide revenues, increased production at the Dawson Creek facility and lower raw material costs, partially offset by a drop in fiber sales.
OSB: Sales at the segment increased 148.8% year over year to $428 million.The company’s adjusted EBITDA margin also jumped significantly to 58.2% from 3.5% reported a year ago. Increased OSB prices and lower raw material costs for the quarter bode well.
Engineered Wood Products or EWP: Segment’s sales increased 16.1% year over year to $108 million. Adjusted EBITDA margin contracted to 1.9% from 3.2% a year ago.
South America: Sales of $50 million increased 31.6% and adjusted EBITDA margin of 24.9% expanded 350 bps from the year-ago quarter. Higher OSB and Siding volumes (local and export) were partially offset by increased imported resin costs and unfavorable foreign currency fluctuations.
Operating Highlights
Adjusted EBITDA of $328 million was up 569.4% from the prior-year figure of $49 million on increased OSB prices and SmartSide sales.
Financials
As of Dec 31, 2020, Louisiana-Pacific had cash and cash equivalents of $535 million compared with $181 million at 2019-end.
Moreover, the board of directors declared a 10% increase in quarterly cash dividends to 16 cents per share, to be paid out on Mar 8, 2021.
Long-term debt was $348 million, flat with 2019-end. For the fourth quarter, net cash provided by operations was $321 million, significantly up from $100 million reported in the year-ago period.
2020 Highlights
For the year, net sales amounted to $2,788 million, up 20.7% from 2019. Earnings per share came in at $4.31 compared with 37 cents in the previous year.
Adjusted EBITDA for the whole year summed up to $781 million, 273.7% up from $209 million in 2019.
Q1 Guidance
For first-quarter 2021, the company expects SmartSide sales to be 35% more from the year-ago quarter.
OSB sales are expected to sequentially rise more than 15%, on similar volumes.
The company anticipates Adjusted EDITDA of more than $380 million.
2021 Outlook
Given the current scenario, Louisiana-Pacific expects capital expenditures for 2021 in the range of $220-$230 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 17.2% due to these changes.
VGM Scores
At this time, Louisiana-Pacific has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Louisiana-Pacific has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Louisiana-Pacific (LPX) Up 21.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Louisiana-Pacific (LPX - Free Report) . Shares have added about 21.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Louisiana-Pacific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Louisiana-Pacific (LPX - Free Report) Beats Q4 Earnings & Revenue Estimates
Louisiana-Pacific Corporation reported impressive results for fourth-quarter 2020, wherein the top and the bottom line surpassed the Zacks Consensus Estimate. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing and favorable wood fiber and resin costs. Operational efficiency and cost-containment efforts also supported its performance.
Detailed Discussion
Louisiana-Pacific reported fourth-quarter adjusted earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.84 by 9.2%. The metric also increased significantly from the year-ago reported figure of 5 cents per share.
Net sales of $860 million topped the consensus estimate of $790 million by 8.9% and increased 60.1% from the year-ago period. The upside was driven by 30% SmartSide revenue growth and a $246-million increase in Oriented Strand Board or OSB prices. Notably, revenues for LP South America increased $12 million from the prior-year quarter.
Segmental Analysis
Siding: The segment’s sales of $259 million were up 16.7% from the prior-year period. The upside was due to a 30% increase in SmartSide revenues owing to 26% higher volume and 4% uptick in prices.
Adjusted EBITDA margin improved 1,120 basis points (bps) from the prior-year quarter to 29.7%. The upside was backed by higher SmartSide revenues, increased production at the Dawson Creek facility and lower raw material costs, partially offset by a drop in fiber sales.
OSB: Sales at the segment increased 148.8% year over year to $428 million.The company’s adjusted EBITDA margin also jumped significantly to 58.2% from 3.5% reported a year ago. Increased OSB prices and lower raw material costs for the quarter bode well.
Engineered Wood Products or EWP: Segment’s sales increased 16.1% year over year to $108 million. Adjusted EBITDA margin contracted to 1.9% from 3.2% a year ago.
South America: Sales of $50 million increased 31.6% and adjusted EBITDA margin of 24.9% expanded 350 bps from the year-ago quarter. Higher OSB and Siding volumes (local and export) were partially offset by increased imported resin costs and unfavorable foreign currency fluctuations.
Operating Highlights
Adjusted EBITDA of $328 million was up 569.4% from the prior-year figure of $49 million on increased OSB prices and SmartSide sales.
Financials
As of Dec 31, 2020, Louisiana-Pacific had cash and cash equivalents of $535 million compared with $181 million at 2019-end.
Moreover, the board of directors declared a 10% increase in quarterly cash dividends to 16 cents per share, to be paid out on Mar 8, 2021.
Long-term debt was $348 million, flat with 2019-end. For the fourth quarter, net cash provided by operations was $321 million, significantly up from $100 million reported in the year-ago period.
2020 Highlights
For the year, net sales amounted to $2,788 million, up 20.7% from 2019. Earnings per share came in at $4.31 compared with 37 cents in the previous year.
Adjusted EBITDA for the whole year summed up to $781 million, 273.7% up from $209 million in 2019.
Q1 Guidance
For first-quarter 2021, the company expects SmartSide sales to be 35% more from the year-ago quarter.
OSB sales are expected to sequentially rise more than 15%, on similar volumes.
The company anticipates Adjusted EDITDA of more than $380 million.
2021 Outlook
Given the current scenario, Louisiana-Pacific expects capital expenditures for 2021 in the range of $220-$230 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 17.2% due to these changes.
VGM Scores
At this time, Louisiana-Pacific has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Louisiana-Pacific has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.