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Louisiana-Pacific (LPX) Q2 Earnings & Net Sales Beat, Up Y/Y
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Louisiana-Pacific Corporation (LPX - Free Report) , or LP, reported stellar second-quarter 2024 results. Earnings and net sales beat the respective Zacks Consensus Estimate and increased on a year-over-year basis.
Several key factors propelled the impressive quarterly performance. There was a notable surge in demand for Siding and OSB, highlighted by a significant increase in volume. Record-breaking volumes for ExpertFinish and BuilderSeries underscored the robust market appetite. Moreover, higher commodity prices, enhanced operational efficiency and a decline in freight, raw materials and labor costs were pivotal in driving margin expansion.
Given the solid demand trend, the company increased its Siding net sales year-over-year growth range.
Detailed Discussion
Louisiana-Pacific reported adjusted earnings per share (EPS) of $2.09, which beat the Zacks Consensus Estimate of $1.86 by 12.4%. The bottom line increased a whopping 280% from the year-ago quarter’s figure of 55 cents on the back of strong adjusted EBITDA.
Net sales of $814 million topped the consensus estimate of $802 million by 1.5% and grew 33% from the prior-year figure, owing to solid Siding and OSB sales.
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
Adjusted EBITDA of $229 million was up 146.2% from the prior-year quarter’s level, backed by higher OSB selling prices and decreases in inflationary costs (including freight, raw materials and labor).
Segmental Analysis
Siding: The segment’s sales of $415 million were up 30% from the prior-year period. A 6% rise in the average net selling price (ASP) and a 22% increase in volume from the prior-year level led to the improvement.
Adjusted EBITDA was $105 million, a 78% increase from $59 million reported a year ago. The growth was attributable to higher net sales accompanied by a decrease in costs, including freight, raw materials and labor. These were partially offset by an increase in mill overhead.
OSB: Sales in the segment increased 53% year over year to $351 million, owing to a rise in OSB prices of 34% and 38% in structural solutions and commodities, respectively. Also, 10% higher shipments in OSB-Structural Solutions and 17% in OSB-Commodity led to the increase.
The segment’s adjusted EBITDA surged 239% year over year to $125 million, driven by higher OSB prices and sales volumes, partially offset by increased mill-related costs.
LP South America (LPSA): Sales of $46 million decreased 12% due to 16% lower ASPs in OSB-Structural Solutions and 15% in Siding.
Adjusted EBITDA plunged 17% from the year-ago quarter to $10 million due to unfavorable currency fluctuations, partially offset by local currency revenues.
Financials
At the second quarter-end, Louisiana-Pacific had $867 million in liquidity. As of Jun 30, 2024, cash and cash equivalents were $317 million compared with $222 million in 2023-end. Long-term debt was $347 million, in line with the 2023-end level.
At the end of the first six months of 2024, net cash provided by operations was $317 million against $30 million of cash used in operating activities a year ago.
During the second quarter, LPX repurchased 1.2 million of its common shares for a total of $102 million. This left 71 million common shares outstanding at the end of Jun 30. Consequently, the company paid an additional $64 million for repurchasing 0.7 million common shares after the quarter end and as of Aug 6. About $271 million remains under the pre-existing share repurchase authorizations.
Q3 Outlook
For the third quarter, the company expects Siding Solutions’ revenues to grow in the band of 16-18% from the year-ago period. It anticipates consolidated adjusted EBITDA in the range of $105-$125 million, of which, $95-$105 million is likely to be contributed by Siding and $10-$20 million is anticipated to be added by OSB.
2024 Guidance Revised
The company now expects Siding Solutions’ revenues to rise year over year between 14% and 16%, up from the prior expected range of 11-13%.
LPX now projects consolidated adjusted EBITDA in the range of $580-$620 million compared with the prior projection of $655-$685 million. Of the guided range, $355-$375 million is likely to be contributed by Siding and $225-$245 million is likely to be added by OSB. Siding adjusted EBITDA was previously expected to be between $340 million and $360 million while OSB was expected between $315 million and $325 million.
LPX still anticipates capital expenditures between $200 million and $220 million.
Boise Cascade Company (BCC - Free Report) reported decent second-quarter 2024 results, with earnings and sales topping the Zacks Consensus Estimate. However, the bottom and top lines declined on a year-over-year basis.
The company's quarterly performance was impacted by weak demand due to high mortgage rates and economic uncertainties. Also, lower volumes and prices in the Wood Products segment led to reduced sales. Despite the current uncertainty in demand, the company expects to achieve solid results in the second half of the year. It aims to provide exceptional value to customers and vendors by leveraging its top-notch manufacturing and distribution network.
Owens Corning (OC - Free Report) reported mixed results for second-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales missed the same. On a year-over-year basis, both earnings and net sales increased on the back of strong commercial execution and manufacturing performance as well as the strategic choice to acquire Masonite.
For the third quarter, the company expects net sales to grow in the low 20% range. Legacy business is expected to be in line with the third quarter of 2023, including the addition of a full quarter of revenues for the Doors segment. It expects to generate an EBIT margin in the high teens with an EBITDA margin in the low 20% range.
TopBuild Corp. (BLD - Free Report) reported lackluster second-quarter 2024 results. Both earnings and sales lagged the Zacks Consensus Estimate. Nonetheless, both earnings and sales increased on a year-over-year basis due to pricing, increased volumes and benefits from acquisitions despite the challenges.
Higher interest rates, project delays and supply constraints continue to impact results across some residential and commercial end markets. The company has also trimmed its sales and adjusted EBITDA view for 2024. BLD now expects net sales to be between $5.3 billion and $5.5 billion compared with the prior expected range of $5.4-$5.6 billion.
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Louisiana-Pacific (LPX) Q2 Earnings & Net Sales Beat, Up Y/Y
Louisiana-Pacific Corporation (LPX - Free Report) , or LP, reported stellar second-quarter 2024 results. Earnings and net sales beat the respective Zacks Consensus Estimate and increased on a year-over-year basis.
Several key factors propelled the impressive quarterly performance. There was a notable surge in demand for Siding and OSB, highlighted by a significant increase in volume. Record-breaking volumes for ExpertFinish and BuilderSeries underscored the robust market appetite. Moreover, higher commodity prices, enhanced operational efficiency and a decline in freight, raw materials and labor costs were pivotal in driving margin expansion.
Given the solid demand trend, the company increased its Siding net sales year-over-year growth range.
Detailed Discussion
Louisiana-Pacific reported adjusted earnings per share (EPS) of $2.09, which beat the Zacks Consensus Estimate of $1.86 by 12.4%. The bottom line increased a whopping 280% from the year-ago quarter’s figure of 55 cents on the back of strong adjusted EBITDA.
Net sales of $814 million topped the consensus estimate of $802 million by 1.5% and grew 33% from the prior-year figure, owing to solid Siding and OSB sales.
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
Louisiana-Pacific Corporation price-consensus-eps-surprise-chart | Louisiana-Pacific Corporation Quote
Adjusted EBITDA of $229 million was up 146.2% from the prior-year quarter’s level, backed by higher OSB selling prices and decreases in inflationary costs (including freight, raw materials and labor).
Segmental Analysis
Siding: The segment’s sales of $415 million were up 30% from the prior-year period. A 6% rise in the average net selling price (ASP) and a 22% increase in volume from the prior-year level led to the improvement.
Adjusted EBITDA was $105 million, a 78% increase from $59 million reported a year ago. The growth was attributable to higher net sales accompanied by a decrease in costs, including freight, raw materials and labor. These were partially offset by an increase in mill overhead.
OSB: Sales in the segment increased 53% year over year to $351 million, owing to a rise in OSB prices of 34% and 38% in structural solutions and commodities, respectively. Also, 10% higher shipments in OSB-Structural Solutions and 17% in OSB-Commodity led to the increase.
The segment’s adjusted EBITDA surged 239% year over year to $125 million, driven by higher OSB prices and sales volumes, partially offset by increased mill-related costs.
LP South America (LPSA): Sales of $46 million decreased 12% due to 16% lower ASPs in OSB-Structural Solutions and 15% in Siding.
Adjusted EBITDA plunged 17% from the year-ago quarter to $10 million due to unfavorable currency fluctuations, partially offset by local currency revenues.
Financials
At the second quarter-end, Louisiana-Pacific had $867 million in liquidity. As of Jun 30, 2024, cash and cash equivalents were $317 million compared with $222 million in 2023-end. Long-term debt was $347 million, in line with the 2023-end level.
At the end of the first six months of 2024, net cash provided by operations was $317 million against $30 million of cash used in operating activities a year ago.
During the second quarter, LPX repurchased 1.2 million of its common shares for a total of $102 million. This left 71 million common shares outstanding at the end of Jun 30. Consequently, the company paid an additional $64 million for repurchasing 0.7 million common shares after the quarter end and as of Aug 6. About $271 million remains under the pre-existing share repurchase authorizations.
Q3 Outlook
For the third quarter, the company expects Siding Solutions’ revenues to grow in the band of 16-18% from the year-ago period. It anticipates consolidated adjusted EBITDA in the range of $105-$125 million, of which, $95-$105 million is likely to be contributed by Siding and $10-$20 million is anticipated to be added by OSB.
2024 Guidance Revised
The company now expects Siding Solutions’ revenues to rise year over year between 14% and 16%, up from the prior expected range of 11-13%.
LPX now projects consolidated adjusted EBITDA in the range of $580-$620 million compared with the prior projection of $655-$685 million. Of the guided range, $355-$375 million is likely to be contributed by Siding and $225-$245 million is likely to be added by OSB. Siding adjusted EBITDA was previously expected to be between $340 million and $360 million while OSB was expected between $315 million and $325 million.
LPX still anticipates capital expenditures between $200 million and $220 million.
Zacks Rank & Recent Construction Releases
Louisiana-Pacific currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boise Cascade Company (BCC - Free Report) reported decent second-quarter 2024 results, with earnings and sales topping the Zacks Consensus Estimate. However, the bottom and top lines declined on a year-over-year basis.
The company's quarterly performance was impacted by weak demand due to high mortgage rates and economic uncertainties. Also, lower volumes and prices in the Wood Products segment led to reduced sales. Despite the current uncertainty in demand, the company expects to achieve solid results in the second half of the year. It aims to provide exceptional value to customers and vendors by leveraging its top-notch manufacturing and distribution network.
Owens Corning (OC - Free Report) reported mixed results for second-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate but net sales missed the same. On a year-over-year basis, both earnings and net sales increased on the back of strong commercial execution and manufacturing performance as well as the strategic choice to acquire Masonite.
For the third quarter, the company expects net sales to grow in the low 20% range. Legacy business is expected to be in line with the third quarter of 2023, including the addition of a full quarter of revenues for the Doors segment. It expects to generate an EBIT margin in the high teens with an EBITDA margin in the low 20% range.
TopBuild Corp. (BLD - Free Report) reported lackluster second-quarter 2024 results. Both earnings and sales lagged the Zacks Consensus Estimate. Nonetheless, both earnings and sales increased on a year-over-year basis due to pricing, increased volumes and benefits from acquisitions despite the challenges.
Higher interest rates, project delays and supply constraints continue to impact results across some residential and commercial end markets. The company has also trimmed its sales and adjusted EBITDA view for 2024. BLD now expects net sales to be between $5.3 billion and $5.5 billion compared with the prior expected range of $5.4-$5.6 billion.