) first-quarter 2014 adjusted loss per share of 5 cents per share
was in line with the Zacks Consensus Estimate. The quarterly loss
of this premier supplier of building materials was a massive drop
from the year-ago quarter's earnings of 40 cents.
The weak bottom line was due to huge foreign exchange losses of
$4.3 million, lower pricing in Oriental Strand Board (OSB) and
lower earnings before interest, taxes, depreciation and
Net sales in the quarter decreased 16.0% year over year to $445
million owing to decline in pricing in the Oriental Strand Board
segment and unfavorable weather. Revenues lagged the Zacks
Consensus Estimate of $487 million by 8.6%.
Adjusted EBITDA from continuing operations of $23 million declined
from $120 million in the prior-year quarter owing to a rise in
operating costs and a decline in OSB segment EBITDA due to lower
Oriental Strand Board (OSB)
: Louisiana-Pacific's OSB segment manufactures and distributes OSB
structural panel products. Sales in the OSB segment decreased 32.1%
year over year to $195 million in the first quarter of 2014 due to
a 38% decline in pricing, partially offset by a 6% increase in
volume. Volumes increased as the company resumed production at the
Dawson Creek, British Columbia mill and the Clarke County, AL mill.
This segment reported an operating loss of $2.0 million in the
first quarter of 2014 versus operating earnings of $98.0 million in
the year-earlier quarter. The segment recorded adjusted EBITDA of
$12 million, down from $109 million in the year-ago quarter
attributable to lower pricing.
Composite Wood Products/Siding:
The Composite Wood Products/Siding segment is engaged in the
production and marketing of siding products and related
accessories, hardboard siding and accessory products, and vinyl
siding products and accessories. These products are used for new
constructions as well as for repair and remodeling. It has three
categories: SmartSide and CanExel siding products and commodity
Sales in the Siding segment improved 7% year over year to $144
million gaining from the rise in pricing as well as volumes in the
SmartSide category. With continuous penetration in retail, repair
and remodel markets and sheds, SmartSide volumes improved 12% year
over year. SmartSide average sales prices also increased 6% year
On the other hand, CanExel siding prices declined 8% year over
year, owing to unfavorable foreign translations. CanExel volumes
were up 13%, owing to higher sales through a promotional winter buy
The segment recorded adjusted EBITDA of $24 million in the quarter,
down 4.0% year over year, due to lower OSB pricing.
Engineered Wood Products (EWP):
The EWP segment produces goods used in new constructions like
I-Joist (IJ), Laminated Veneer Lumber (LVL) and Laminated Strand
Engineered Wood Products sales increased 4.8% year over year to $66
million in the quarter, driven mostly by higher volume growth in
IJ, LVL and LSL. Volumes of IJ increased 3% year over year and 2%
for both LVL and LSL, benefiting from higher LSL sales. Pricing was
up 11% in IJ and 8% in both LVL and LSL due to price increases
implemented in 2013.
The segment's operating loss was $3 million, narrower than the
prior-year quarter's loss of $4 million due to higher sales. The
segment's adjusted EBITDA of $2 million was an improvement,
compared to breakeven in the prior-year quarter, due to increased
South America Segment:
The South America segment produces OSB structural panel and siding
products in Chile and Brazil.
Segment sales reduced 17.8% year over year to $37 million, owing to
a decline in volume and prices in Chile. Volumes in Chile decreased
18% and increased 7% in Brazil. Including the changes in foreign
exchange rates, prices decreased 13% year over year in Chile but
increased 5% in Brazil. In terms of local currency, prices improved
2% in Chile and 11% in Brazil.
South America segment's operating income of $4 million in the first
quarter 2014 declined from the year-ago figure of $6 million. The
segment's adjusted EBITDA of $7 million declined from $9 million
from the prior-year quarter. The decline in operating income and
adjusted EBITDA was due to weaker volume and pricing in Chile
Louisiana-Pacific continues to be optimistic about the increase in
residential construction spending and believes that it will boost
its business in the long term.
Louisiana-Pacific carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Investors interested can also consider stocks like
Simpson Manufacturing Co., Inc.
Toll Brothers Inc.
). While Simpson Manufacturing sports a Zacks Rank #1 (Strong Buy),
Aegion Corporation and Toll Brothers carry a Zacks Rank #2
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