A premier supplier of building materials,
) reached a new 52-week high of $19.08 on December 24, 2012, with
a market cap of $2.62 billion.
The strong performance has been driven by an increase in demand
in the housing market. With housing market recovery gaining
momentum, there has been a drop in inventory levels and an
increase in home prices. As such, most home building companies
are gearing up to introduce a number of new homes in order to
meet the increase in demand, which implies that demand for
building materials has also improved.
Third Quarter 2012 Recap
Louisiana-Pacific Corporation reported adjusted earnings per
share (EPS) of 20 cents from continuing operations in the third
quarter of 2012, missing the Zacks Consensus Estimate of 25
cents. Results, however, improved significantly from the
prior-year quarter loss of 19 cents, owing to improved pricing in
the Oriental Strand Board (OSB) segment.
Net sales in the quarter improved 33% to $468 million, owing to
higher volumes at OSB and Siding segments and price increases at
the OSB segment. Revenues however, lagged the Zacks Consensus
Estimate of $475 million.
Agreement of Estimate Revisions
Over the last 60 days, 7 out of the 13 estimates for the fourth
quarter of fiscal 2012 have gone up, following higher volumes at
OSB and Siding segments and price increases at the OSB segment
during the third quarter of 2012. Over the past 30 days, 2
estimates moved up while 1 estimate went up in the last 7 days.
As a result of the upward estimate revisions over the past 60
days, the Zacks Consensus Estimate has gone up by 4 cents (or
40%) to 14 cents.
Of the 11 estimates for fiscal 2012, 7 moved up whereas 2
estimates moved down over the last 60 days. Over the last 30
days, 3 estimates for fiscal 2012 shot up while 1 went down. Only
1 estimate went up over the last 7 days .The Zacks Consensus
Estimate for fiscal 2012 is 31 cents.
A peer of
), Louisiana-Pacific is optimistic about increase in housing
construction activity and overall price appreciation of the
housing market. However, the company is cautious about the slow
global macroeconomic conditions, uncertain US economic recovery,
sluggishness of remodeling industry, European crisis and slowing
We currently have a Neutral recommendation on Louisiana-Pacific.
The stock carries a Zacks #3 Rank (short-term 'Hold' rating).
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