) reported adjusted earnings per share (EPS) from continuing
operations of 18 cents in the fourth quarter of 2012, missing the
Zacks Consensus Estimate of 20 cents per share by 10%.
Earnings, however, turned around from the prior-year quarter loss
of 33 cents owing to improved pricing in the OSB segment and
solid results in the Siding segment. With the improving housing
market, there is an increase in new home construction activities,
which is boosting demand for Louisiana-Pacific's products.
Net sales in the quarter improved 47% to $459 million, owing to
double-digit volume increase at OSB and Siding segments and price
increases at the OSB segment. Revenues beat the Zacks Consensus
Estimate of $437 million by 5.03%.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) from continuing operations were $71 million
versus a loss of $12 million in the prior-year quarter, driven by
strong net sales rise.
Oriental Strand Board
(OSB): The OSB segment manufactures and distributes OSB
structural panel goods.
Sales in the segment grew 86% to $243 million in the quarter
driven by 64% increase in pricing as the housing market gained
momentum. The improved housing market also resulted in volume
growth of 16% for the segment. The segment recorded adjusted
EBITDA of $68 million much higher than a loss of $5 million in
the prior-year quarter attributable to pricing benefits.
Composite Wood Products/Siding:
The Composite Wood Products/Siding segment is engaged in the
production and marketing of SmartSide and CanExel siding products
and commodity OSB. These products are used for new constructions
as well as for repair and remodeling.
Sales in the Siding segment improved 25% to $117 million
benefiting from improved pricing and double-digit increase in
volume in the quarter.
Driven by the housing market recovery momentum, SmartSide volumes
improved 19% year over year and CanExel siding volume was up 27%.
The segment recorded adjusted EBITDA of $15 million in the
quarter, up 50% from the prior-year quarter.
Engineered Wood Products
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 11.0% year over year to
$52 million in the quarter. Volumes of I-Joists were up 2% owing
to improving housing demand while volumes of LVL and LSL were up
14% year over year. Pricing was up 5% in I-Joists, and down 1% in
LVL and LSL, due to changes in product mix. The segment's
adjusted EBITDA was a loss of $1.7 million compared to the
prior-year loss of $1 million in the prior-year quarter.
The segment manufactures OSB structural panels and siding
products in Chile and Brazil. Segment sales surged 23% to $42
million. Volumes in Chile were up 13% on the back of strong
demand for wooden housing while volumes in Brazil were up 14%
attributable to greater penetration of the local market. Driven
by changes in foreign exchange rates, prices increased 18% in
Chile and declined 4% in Brazil. In terms of local currency,
prices improved 11% in both Chile and Brazil. The segment's
adjusted EBITDA of $10 million grew more than twofold on a
year-over-year basis from $4 million in the prior-year quarter.
Peace Valley Acquisition
During fourth quarter 2012, Louisiana-Pacific entered into an
agreement with Canfor Corporation (CFP.TO) to acquire the
latter's 50% share in the Peace Valley Oriented Strand Board
(OSB) mill, which both the companies jointly owned. Louisiana
will pay $75 million for this mill and will thereby become the
sole owner. Louisiana-Pacific's OSB segment is expected to
benefit from the acquisition. 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
The company reported adjusted earnings per share (EPS) from
continuing operations of 35 cents in fiscal 2012, missing the
Zacks Consensus Estimate of 37 cents per share by 5.4%. Earnings,
however, turned around from the prior-year's loss of 73 cents
owing to improved pricing in the OSB segment.
Net sales in the quarter improved 27% to $1.7 billion, owing
to higher volumes at OSB and Siding segments and price increases
at the OSB segment. Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) from continuing operations
were $203 million versus a loss of $5 million in the prior-year.
D R HORTON INC (DHI): Free Stock Analysis
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Louisiana-Pacific is optimistic about its liquidity position and
increasing momentum of the housing market in fiscal 2013 and
intends to increase its investment in its facilities despite poor
job market, federal deficit and uncertain credit availability in
the U.S. The company anticipates higher cost of raw materials in
the first quarter of 2013.
Louisiana-Pacific carries a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Many other stocks in the broader sector are currently performing
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D.R. Horton Inc.
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