Louisiana-Pacific Corporation ( LPX )
reported an adjusted EPS of 2 cents per share from continuing
operations in the second quarter of 2012 missing Zacks Consensus
Estimate of 4 cents. The earnings, however, improved from the
prior-year quarter loss of 19 cents.
Net sales in the quarter improved 18% to $428 million, owing to
higher volumes at Oriental Strand Board (OSB) and Siding segments
and price increases at the OSB segment. Revenues also beat
the Zacks Consensus Estimate of $419 million, attributable to
strong performance of the OSB and Siding segments.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations were $37 million
versus a loss of $4 million in the prior-year quarter.
Oriental Strand Board(OSB) :
Louisiana-Pacific's OSB segment manufactures and distributes OSB
structural panel products. Sales in the segment grew 38% to $195
million in the quarter, owing to an increase in housing
The segment witnessed volume growth of 13% and a pricing gain of
22%. The segment recorded an operating income of $17 million,
attributable to pricing benefits in the quarter, compared to a loss
of $23 million in the prior-year quarter.
Composite Wood Products/Siding: The Siding
segment manufactures wood-based siding (SmartSide and CanExel
siding) and related accessories that are used for new constructions
as well as for repair and remodeling. Sales in the Siding segment
improved 16% to $137 million benefiting from increased new housing
activity in the quarter.
The average sales price of SmartSide was up 2% year over year
while that of CanExel was up 1%. SmartSide volumes improved 9% year
over year driven by continuous penetration in the retail, repair
and remodel markets. CanExel siding volume was down 31% due to
supply chain problems. The segment recorded an operating income of
$19 million in the quarter, up from $11 million recorded in the
Engineered Wood Products (EWP): The EWP segment
makes I-Joists, laminated veneer lumber (LVL) and laminated strand
lumber (LSL), which is primarily used in new construction
activities. Engineered Wood Products sales decreased 4% year over
year to $52 million in the quarter. Volumes of I-Joists were up 17%
while volumes of LVL and LSL were down 9%, owing to decline in
Pricing was down 2% in I-Joists, LVL and LSL, due to changes in
product mix and flat pricing. The segment's operating loss of $3
million was flat on a year-over-year basis.
South America: The segment manufactures OSB
structural panels and siding products in Chile and Brazil. Segment
sales surged 7.5% to $43 million. Volumes in Chile were up 30%, on
the back of strong demand for wooden housing while volumes in
Brazil were down 27%, due to lower demand from export markets
particularly China. The segment's operating income of $4 million
was flat on a year-over-year basis.
Louisiana-Pacific is optimistic about the low mortgage rates,
increase in housing construction activity and overall improvement
of the housing market. However, the company is cautious about the
financial crisis in Europe.
Currently, we have an Outperform recommendation on
Louisiana-Pacific Corporation. The company carries Zacks #2Rank in
the near term (Buy rating).
LOUISIANA PAC (LPX): Free Stock Analysis Report
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