) reported adjusted earnings per share (EPS) of 41 cents from
continuing operations in the second quarter of 2013, surpassing
the Zacks Consensus Estimate of 31 cents by 32.3%. Earnings also
improved significantly from the prior-year quarter earnings of 2
cents, attributable to improved pricing in the OSB segment and
increased demand for LPX products.
Net sales in the quarter improved 34% year over year to $572.6
million, owing to volume and price increase across all segments
except the South American segment. Revenues also beat the Zacks
Consensus Estimate of $550 million by 4.1%.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations were $122
million much higher than $37 million in the prior-year quarter,
driven by a significant increase in net sales.
Oriental Strand Board (OSB):
The OSB segment manufactures and distributes OSB structural panel
Sales in the segment surged 57.1% to $306.2 million in the
quarter, driven by a 59% increase in pricing. Improved housing
starts also resulted in volume growth of 2% for the segment. The
segment recorded adjusted EBITDA of $108 million, much higher
than $28.0 million in the prior-year quarter, attributable to
pricing benefits. Peace Valley, which was acquired in May this
year, contributed $7.8 million to OSB's adjusted EBITDA, compared
to $3 million in the prior year quarter.
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 11.5% to $152.7 million
benefiting from improved pricing and volumes in the quarter.
Driven by the improvement in housing starts and penetration in
retail, repair and remodel markets and sheds, SmartSide volumes
improved 8% year over year. SmartSide average sales prices
increased 2% year over year. On the other hand, CanExel siding
volume was up 4%. CanExel prices were up 2% in Canadian dollar,
due to favorable mix, whereas it was down 2% in U.S
dollars. The segment recorded adjusted EBITDA of $32
million in the quarter, up 33.3% from the prior-year quarter,
driven by increased 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 17.8% year over year to
$60.9 million in the quarter. Owing to improving housing demand,
volumes of I-Joists were up 2% and volumes of LVL and LSL were up
15% year over year. Pricing was up 13% in I-Joists and 5% in LVL
and LSL due to price increases across all product lines. The
segment reported decline in adjusted EBITDA.
The segment manufactures OSB structural panels and siding
products in Chile and Brazil. Segment sales grew 3.7% to $44.3
million. Volumes in Chile were down 5% due to decline in sales of
imported products. Volumes in Brazil were down 10% year over year
due to decline in export sales. Including the changes in foreign
exchange rates, prices increased 6% in Chile and 9% in Brazil. In
terms of local currency, however, prices improved 5% in Chile and
10% in Brazil. The segment's adjusted EBITDA of $9 million was
higher than $6 million in the prior-year quarter.
Despite recent headwinds like weather, labor and financing issues
in the housing market, Louisiana-Pacific continues to be
optimistic about the housing market recovery and believes that
the company is well prepared to meet the resulting extra demand.
Louisiana-Pacific carries a Zacks Rank #3 (Hold).
Some other companies from the construction sector that are doing
well and deserve a mention include
Universal Forest Products Inc.
). All the three companies carry a Zacks Rank #2 (Buy).
LOUISIANA PAC (LPX): Free Stock Analysis
POTLATCH CORP (PCH): Free Stock Analysis
RAYONIER INC (RYN): Free Stock Analysis
UNIVL FST PRODS (UFPI): Free Stock Analysis
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