) reported an adjusted loss of 6 cents per share in the first
quarter of 2012, narrower than a loss of 12 cents per share in the
same quarter of 2011 as well as the Zacks Consensus Estimate of a
loss of 15 cents. The narrower loss was attributable to a better
top line in the quarter with the gradual recovery in the overall
Net sales in the quarter improved 9% to $362 million. Revenues
also beat the Zacks Consensus Estimate of $341 million due to
strong performance in almost all operating segments, especially in
Adjusted EBITDA from continuing operations was $21 million
versus $13 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 13% to $149
million in the quarter. The segment witnessed volume growth of 4%
and a pricing tailwind of 6%. The segment nonetheless recorded an
operating loss of $0.3 million in the quarter, albeit better than a
loss of $9.1 million in the prior-year quarter due to pricing
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 in repair and remodeling. Sales in the
Siding segment improved 6.5% to $113.1 million benefiting from
increased housing activity in the quarter.
The average sales price of SmartSide was up 2% year over year
while that of CanExel was down 6%. Volume improved by 9% for
SmartSide year over year driven by better sales in the retail,
repair and remodel markets. The CanExel siding volume was down 5%
due to lower shipments in Europe and weakness in the Canadian
The segment recorded an operating gain of $16.8 million in the
quarter, up from $12.7 million recorded in the prior-year
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. Sales in the Engineered Wood Products
increased slightly to $48.6 million in the quarter.
Volumes of I-Joists were up 2% while volumes of LVL and LSL were
up 14%, both driven by better demand. Pricing was up 3% in I-Joists
but down 1% in LVL and LSL. The segment recorded an operating loss
of $2.8 million in the quarter, an improvement from a loss of $5.5
million recorded in the prior-year quarter.
The segment manufactures OSB structural panel and siding products
in Chile and Brazil. Segment sales surged 20% to $42.4 million.
Volumes in Chile were up 14%, while volumes in Brazil were up 2%.
Pricing was up 10% in Chile and down 6% in Brazil. The segment
recorded operating income of $3.1 million in the quarter, lower
than $3.6 million recorded in the prior-year quarter.
: The segment comprises Louisiana-Pacific's molding business and
the US GreenFiber joint venture that makes cellulose insulation and
various other non-operating facilities. Sales in the segment were
$10.0 million, down 5% over the prior-year quarter. The segment
recorded an operating loss of $0.7 million in the quarter, flat
with the prior-year quarter.
Louisiana-Pacific is optimistic now with the housing market on a
recovery mode. Management believes it will be able to take
advantage of the incremental demand from the housing upturn as it
has the necessary capacity in all its businesses.
Louisiana-Pacific is planning to spend approximately $25 million
for capital expenditures in 2012.
Currently, we hold a Zacks #3 Rank (short-term Hold rating) on
Louisiana-Pacific. Over the long term, we provide a Neutral
recommendation on the stock.
LOUISIANA PAC (LPX): Free Stock Analysis Report
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