) to beat expectations when it reports first quarter 2013 results
on May 7.
Why a Likely Positive Surprise?
Our proven model shows that Louisiana-Pacific is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Louisiana's Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +9.76%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #1 (Strong Buy):
ouisiana-Pacific carries a Zacks Rank #1. Note that stocks with
Zacks Ranks of #1, #2 and #3 have a significantly higher chance
of beating earnings. The sell rated stocks (#4 and #5) should
never be considered going into an earnings announcement.
The combination of Louisiana-Pacific's Zacks Rank # 1 (Strong
Buy) and +9.76% ESP makes us very confident in looking for a
positive earnings beat on May 7.
What is Driving the Better Than Expected
Louisiana-Pacific has been witnessing volume and pricing growth
in its the Oriental Strand Board (OSB) and Siding segments.
Further improvement in the housing market is expected to boost
further volume and pricing growth in the upcoming quarters.
Louisiana-Pacific is optimistic about the growing housing
construction activity and intends to increase its investment in
its facilities despite a poor job market, federal deficit and
uncertain credit availability in the U.S. The company entered
into an agreement with Canfor Corporation to acquire the latter's
50% share in the Peace Valley Oriented Strand Board (OSB) mill
during fourth quarter 2012, which both the companies jointly
owned. Louisiana-Pacific's OSB segment is expected to benefit
from the acquisition in the near future. It will increase the
production capacity of the segment, thus improving its ability to
benefit from the improving demand for OSB products driven by
improving housing market.
Other Stocks to Consider
Louisiana-Pacific is not the only firm looking up this
earnings season. We also see likely earnings beat coming from
these 3 companies from service sector:
), Earnings ESP of +3.13% and Zacks Rank #2 (Buy)
Martin Marietta Materials Inc.
), Earnings ESP of +4.27% and Zacks Rank #3 (Hold)
), Earnings ESP of +5.56% and Zacks Rank #3 (Hold)
LOUISIANA PAC (LPX): Free Stock Analysis
MARTIN MRT-MATL (MLM): Free Stock Analysis
WILLIAMS-SONOMA (WSM): Free Stock Analysis
WEYERHAEUSER CO (WY): Free Stock Analysis
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