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Louisiana-Pacific Corporation (LPX - Free Report) reported impressive results for fourth-quarter 2020, wherein the top and the bottom line surpassed the Zacks Consensus Estimate. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing and favorable wood fiber and resin costs. Operational efficiency and cost-containment efforts also supported its performance.
Following the announcement, shares of the company gained 0.7% on Feb 16.
Detailed Discussion
Louisiana-Pacific reported fourth-quarter adjusted earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.84 by 9.2%. The metric also increased significantly from the year-ago reported figure of 5 cents per share.
Net sales of $860 million topped the consensus estimate of $790 million by 8.9% and increased 60.1% from the year-ago period. The upside was driven by 30% SmartSide revenue growth and a $246-million increase in Oriented Strand Board or OSB prices. Notably, revenues for LP South America increased $12 million from the prior-year quarter.
LouisianaPacific Corporation Price, Consensus and EPS Surprise
Siding: The segment’s sales of $259 million were up 16.7% from the prior-year period. The upside was due to a 30% increase in SmartSide revenues owing to 26% higher volume and 4% uptick in prices.
Adjusted EBITDA margin improved 1,120 basis points (bps) from the prior-year quarter to 29.7%. The upside was backed by higher SmartSide revenues, increased production at the Dawson Creek facility and lower raw material costs, partially offset by a drop in fiber sales.
OSB: Sales at the segment increased 148.8% year over year to $428 million.The company’s adjusted EBITDA margin also jumped significantly to 58.2% from 3.5% reported a year ago. Increased OSB prices and lower raw material costs for the quarter bode well.
Engineered Wood Products or EWP: Segment’s sales increased 16.1% year over year to $108 million. Adjusted EBITDA margin contracted to 1.9% from 3.2% a year ago.
South America: Sales of $50 million increased 31.6% and adjusted EBITDA margin of 24.9% expanded 350 bps from the year-ago quarter. Higher OSB and Siding volumes (local and export) were partially offset by increased imported resin costs and unfavorable foreign currency fluctuations.
Operating Highlights
Adjusted EBITDA of $328 million was up 569.4% from the prior-year figure of $49 million on increased OSB prices and SmartSide sales.
Financials
As of Dec 31, 2020, Louisiana-Pacific had cash and cash equivalents of $535 million compared with $181 million at 2019-end.
Moreover, the board of directors declared a 10% increase in quarterly cash dividends to 16 cents per share, to be paid out on Mar 8, 2021.
Long-term debt was $348 million, flat with 2019-end. For the fourth quarter, net cash provided by operations was $321 million, significantly up from $100 million reported in the year-ago period.
2020 Highlights
For the year, net sales amounted to $2,788 million, up 20.7% from 2019. Earnings per share came in at $4.31 compared with 37 cents in the previous year.
Adjusted EBITDA for the whole year summed up to $781 million, 273.7% up from $209 million in 2019.
Q1 Guidance
For first-quarter 2021, the company expects SmartSide sales to be 35% more from the year-ago quarter.
OSB sales are expected to sequentially rise more than 15%, on similar volumes.
The company anticipates Adjusted EDITDA of more than $380 million.
2021 Outlook
Given the current scenario, Louisiana-Pacific expects capital expenditures for 2021 in the range of $220-$230 million.
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Louisiana-Pacific (LPX) Beats Q4 Earnings & Revenue Estimates
Louisiana-Pacific Corporation (LPX - Free Report) reported impressive results for fourth-quarter 2020, wherein the top and the bottom line surpassed the Zacks Consensus Estimate. The upside was backed by strong SmartSide strand revenues, increase in OSB pricing and favorable wood fiber and resin costs. Operational efficiency and cost-containment efforts also supported its performance.
Following the announcement, shares of the company gained 0.7% on Feb 16.
Detailed Discussion
Louisiana-Pacific reported fourth-quarter adjusted earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.84 by 9.2%. The metric also increased significantly from the year-ago reported figure of 5 cents per share.
Net sales of $860 million topped the consensus estimate of $790 million by 8.9% and increased 60.1% from the year-ago period. The upside was driven by 30% SmartSide revenue growth and a $246-million increase in Oriented Strand Board or OSB prices. Notably, revenues for LP South America increased $12 million from the prior-year quarter.
LouisianaPacific Corporation Price, Consensus and EPS Surprise
LouisianaPacific Corporation price-consensus-eps-surprise-chart | LouisianaPacific Corporation Quote
Segmental Analysis
Siding: The segment’s sales of $259 million were up 16.7% from the prior-year period. The upside was due to a 30% increase in SmartSide revenues owing to 26% higher volume and 4% uptick in prices.
Adjusted EBITDA margin improved 1,120 basis points (bps) from the prior-year quarter to 29.7%. The upside was backed by higher SmartSide revenues, increased production at the Dawson Creek facility and lower raw material costs, partially offset by a drop in fiber sales.
OSB: Sales at the segment increased 148.8% year over year to $428 million.The company’s adjusted EBITDA margin also jumped significantly to 58.2% from 3.5% reported a year ago. Increased OSB prices and lower raw material costs for the quarter bode well.
Engineered Wood Products or EWP: Segment’s sales increased 16.1% year over year to $108 million. Adjusted EBITDA margin contracted to 1.9% from 3.2% a year ago.
South America: Sales of $50 million increased 31.6% and adjusted EBITDA margin of 24.9% expanded 350 bps from the year-ago quarter. Higher OSB and Siding volumes (local and export) were partially offset by increased imported resin costs and unfavorable foreign currency fluctuations.
Operating Highlights
Adjusted EBITDA of $328 million was up 569.4% from the prior-year figure of $49 million on increased OSB prices and SmartSide sales.
Financials
As of Dec 31, 2020, Louisiana-Pacific had cash and cash equivalents of $535 million compared with $181 million at 2019-end.
Moreover, the board of directors declared a 10% increase in quarterly cash dividends to 16 cents per share, to be paid out on Mar 8, 2021.
Long-term debt was $348 million, flat with 2019-end. For the fourth quarter, net cash provided by operations was $321 million, significantly up from $100 million reported in the year-ago period.
2020 Highlights
For the year, net sales amounted to $2,788 million, up 20.7% from 2019. Earnings per share came in at $4.31 compared with 37 cents in the previous year.
Adjusted EBITDA for the whole year summed up to $781 million, 273.7% up from $209 million in 2019.
Q1 Guidance
For first-quarter 2021, the company expects SmartSide sales to be 35% more from the year-ago quarter.
OSB sales are expected to sequentially rise more than 15%, on similar volumes.
The company anticipates Adjusted EDITDA of more than $380 million.
2021 Outlook
Given the current scenario, Louisiana-Pacific expects capital expenditures for 2021 in the range of $220-$230 million.
Zacks Rank
Watsco — which shares space with Weyerhaeuser Company (WY - Free Report) , UFP Industries, Inc. (UFPI - Free Report) and Rayonier Inc. (RYN - Free Report) 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.
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Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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