We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Louisiana-Pacific (LPX) Stock Down Despite Q2 Earnings Beat
Read MoreHide Full Article
Louisiana-Pacific Corporation (LPX - Free Report) reported impressive results for second-quarter 2020, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Its adjusted earnings surged nearly 300% year over year despite lower revenues. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing, and favorable wood fiber as well as resin costs. Operational efficiency and cost-containment efforts also supported the growth.
Shares of the company slipped 1.7% on Aug 4, post the earnings release. The company continues to suspend SmartSide Strand revenue growth projection for 2020 but expects high single-digit improvement for the third quarter. Also, it still expects 2020 capital expenditure to be $70 million.
Notably, the company announced the CanExel sale completion for $14 million in cash.
Detailed Discussion
Louisiana-Pacific reported second-quarter adjusted earnings of 43 cents per share, which beat the Zacks Consensus Estimate of 18 cents by 138.9%. The metric also increased a whopping 290.9% from the year-ago reported figure of 11 cents per share.
LouisianaPacific Corporation Price, Consensus and EPS Surprise
Net sales of $548 million topped the consensus estimate of $543 million by 0.9% but decreased 6.8% from the year-ago period. Softness across the segments, barring OSB, impacted the results.
Single-family housing starts declined 12.8% year over year. Multi-family starts also fell 28.8% from the prior year.
Segmental Analysis
Siding: The segment’s sales of $220 million were down 5% from the prior-year period. The decline was due to a decrease in SmartSide fiber sales, partially offset by a 3% increase in SmartSide strand volume.
Adjusted EBITDA improved 13% and margin rose 400 basis points (bps) from the prior-year quarter to $51 million and 23%, respectively. The upside was backed by a rise in SmartSide strand revenues, increased production at the Dawson Creek facility, and sourcing and operational efficiency savings. This was partially offset by a decrease in SmartSide fiber sales.
OSB: Sales in the segment increased 3% year over year to $204 million. The company’s adjusted EBITDA margin also jumped significantly to 23% from negative 2% reported a year ago. Increased OSB prices, lower raw material costs and cost-containment efforts helped it gain during the quarter.
EWP: Segment’s sales declined 26% year over year to $79 million. Adjusted EBITDA margin also contracted 500 bps year over year to 4%. Difficult year-over-year comparison, temporary shutdown of the I-Joist manufacturing unit in Quebec, and reduced demand for EWP products hurt the segment.
South America: Sales of $38 million decreased 5% but adjusted EBITDA margin of 29% expanded 600 bps from the year-ago quarter due to unfavorable foreign currency fluctuations.
Operating Highlights
Gross margin expanded 810 bps year over year to 21.4%. Selling, general and administrative expenses — as a percentage of revenues — contracted 80 bps.
Adjusted EBITDA of $97 million was up 83% from the prior-year figure of $53 million. Adjusted EBITDA margin also rose a whopping 670 bps to 17.7%, driven by higher OSB prices.
Financials
As of Jun 30, 2020, Louisiana-Pacific had cash and cash equivalents of $259 million compared with $181 million at 2019-end. The company repaid the $350 million of revolving credit drawn in March. Also, it expanded the existing $350-million credit facility to $550 million.
Long-term debt was $348 million, flat with 2019-end. For the second quarter, net cash provided by operations was $129 million, significantly up from $54 million reported in the year-ago period.
Weyerhaeuser Company (WY - Free Report) reported impressive second-quarter 2020 results, wherein earnings and revenues comfortably surpassed the Zacks Consensus Estimate. The company delivered strong performance across businesses despite COVID-19 impacts.
UFP Industries, Inc. (UFPI - Free Report) reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products, as well as lower costs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Louisiana-Pacific (LPX) Stock Down Despite Q2 Earnings Beat
Louisiana-Pacific Corporation (LPX - Free Report) reported impressive results for second-quarter 2020, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Its adjusted earnings surged nearly 300% year over year despite lower revenues. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing, and favorable wood fiber as well as resin costs. Operational efficiency and cost-containment efforts also supported the growth.
Shares of the company slipped 1.7% on Aug 4, post the earnings release. The company continues to suspend SmartSide Strand revenue growth projection for 2020 but expects high single-digit improvement for the third quarter. Also, it still expects 2020 capital expenditure to be $70 million.
Notably, the company announced the CanExel sale completion for $14 million in cash.
Detailed Discussion
Louisiana-Pacific reported second-quarter adjusted earnings of 43 cents per share, which beat the Zacks Consensus Estimate of 18 cents by 138.9%. The metric also increased a whopping 290.9% from the year-ago reported figure of 11 cents per share.
LouisianaPacific Corporation Price, Consensus and EPS Surprise
LouisianaPacific Corporation price-consensus-eps-surprise-chart | LouisianaPacific Corporation Quote
Net sales of $548 million topped the consensus estimate of $543 million by 0.9% but decreased 6.8% from the year-ago period. Softness across the segments, barring OSB, impacted the results.
Single-family housing starts declined 12.8% year over year. Multi-family starts also fell 28.8% from the prior year.
Segmental Analysis
Siding: The segment’s sales of $220 million were down 5% from the prior-year period. The decline was due to a decrease in SmartSide fiber sales, partially offset by a 3% increase in SmartSide strand volume.
Adjusted EBITDA improved 13% and margin rose 400 basis points (bps) from the prior-year quarter to $51 million and 23%, respectively. The upside was backed by a rise in SmartSide strand revenues, increased production at the Dawson Creek facility, and sourcing and operational efficiency savings. This was partially offset by a decrease in SmartSide fiber sales.
OSB: Sales in the segment increased 3% year over year to $204 million. The company’s adjusted EBITDA margin also jumped significantly to 23% from negative 2% reported a year ago. Increased OSB prices, lower raw material costs and cost-containment efforts helped it gain during the quarter.
EWP: Segment’s sales declined 26% year over year to $79 million. Adjusted EBITDA margin also contracted 500 bps year over year to 4%. Difficult year-over-year comparison, temporary shutdown of the I-Joist manufacturing unit in Quebec, and reduced demand for EWP products hurt the segment.
South America: Sales of $38 million decreased 5% but adjusted EBITDA margin of 29% expanded 600 bps from the year-ago quarter due to unfavorable foreign currency fluctuations.
Operating Highlights
Gross margin expanded 810 bps year over year to 21.4%. Selling, general and administrative expenses — as a percentage of revenues — contracted 80 bps.
Adjusted EBITDA of $97 million was up 83% from the prior-year figure of $53 million. Adjusted EBITDA margin also rose a whopping 670 bps to 17.7%, driven by higher OSB prices.
Financials
As of Jun 30, 2020, Louisiana-Pacific had cash and cash equivalents of $259 million compared with $181 million at 2019-end. The company repaid the $350 million of revolving credit drawn in March. Also, it expanded the existing $350-million credit facility to $550 million.
Long-term debt was $348 million, flat with 2019-end. For the second quarter, net cash provided by operations was $129 million, significantly up from $54 million reported in the year-ago period.
Zacks Rank & Peer Releases
Louisiana-Pacific, which shares space with Norbord Inc. in the Zacks Building Products - Wood industry, currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Weyerhaeuser Company (WY - Free Report) reported impressive second-quarter 2020 results, wherein earnings and revenues comfortably surpassed the Zacks Consensus Estimate. The company delivered strong performance across businesses despite COVID-19 impacts.
UFP Industries, Inc. (UFPI - Free Report) reported impressive earnings for second-quarter 2020. Earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew on a year-over-year basis, given greater-than-expected demand for home improvement products, as well as lower costs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>