Louisiana-Pacific's Loss Widens

Louisiana-Pacific Corporation (LPX - Snapshot Report) reported a broader loss of 33 cents per share in the fourth quarter of 2011 compared with the same of 12 cents per share in the same quarter of 2010 and the Zacks Consensus Estimate of a loss of 20 cents per share.

The wider loss was attributable to sluggish demand for building products due to seasonality and inventory reduction actions taken by the company’s customers at year's end.

Net sales in the quarter dipped over 1% to $312.2 million. Adjusted EBITDA from continuing operations was a loss of $14 million compared with an income of $0.2 million in the fourth quarter of 2010.

Segment Results

Sales in the Oriented Strand Board segment grew 3% to $131 million in the quarter. Adjusted EBITDA from continuing operations was a loss of $7 million compared with a loss of $3 million in the fourth quarter of 2010. Sales volumes and sales price were generally flat compared with the year-ago level.

Sales in the Siding segment decreased 10% to $93 million. Adjusted EBITDA from continuing operations was $10 million, a decline of $6 million from the fourth quarter of 2010.

Sales in the Engineered Wood Products went down 6% to $46 million. Adjusted EBITDA was a loss of $1 million, which is an improvement of $0.6 million compared with fourth quarter of 2010.

Sales in the South America segment (comprising facilities in Chile and Brazil) surged 34% to $34 million. Adjusted EBITDA from continuing operations was $4 million, an improvement of $2 million from the fourth quarter of 2010.

Annual Results

For full year 2011, Louisiana-Pacific recorded a wider loss of 99 cents per share compared with the same of 20 cents per share a year ago. Net sales dipped 2% to $1.36 billion from $1.38 billion in 2010. Adjusted EBITDA from continuing operations was a loss of $17 million compared with an income of $82 million in 2010.

Financial Results

Louisiana-Pacific had cash and cash equivalents of $340.0 million as of December 31, 2011, down from $389.3 million as of December 31, 2010. Long-term debt increased to $721.2 million from $714.7 million as of December 31, 2010.

In 2011, the company had an operating cash outflow of $40.2 million compared with an inflow of $47.8 million in 2010. Meanwhile, capital expenditures (net) increased to $20.1 million from $11.2 million a year ago.

Our Take

Louisiana-Pacific is a leading supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. The company’s main competitor is Weyerhaeuser Company (WY - Analyst Report). Currently, it retains a Zacks #3 Rank on its shares, which translates to a short-term (1 to 3 months) rating of “Hold”.

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