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Louisiana-Pacific (LPX) Q3 Earnings & Sales Beat, Stock Up

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Louisiana-Pacific Corporation or LP (LPX - Free Report) reported better than expected results for third-quarter 2022, wherein both the top and the bottom line surpassed their respective Zacks Consensus Estimate. However, these metrics declined year over year due to lower OSB prices.

LPX’s shares rose 1.06% in the pre-market trading session on Nov 1, after the earnings release.

LP chairman and CEO Brad Southern, stated, "New residential construction appears to be slowing, and OSB prices have stabilized at a more historically normal level. However, demand for SmartSide siding remains strong, especially in repair & remodeling applications. LP is investing in long-term growth, including expanding the Houlton, Maine siding facility and plans to add new ExpertFinish capacity in Washington."

Detailed Discussion

Louisiana-Pacific reported adjusted earnings of $1.72 per share, beating the Zacks Consensus Estimate of $1.62 by 6.2%. The bottom line declined 51.1% from the year-ago quarter’s reported figure of $3.52 per share.

LouisianaPacific Corporation Price, Consensus and EPS Surprise


LouisianaPacific Corporation Price, Consensus and EPS Surprise

LouisianaPacific Corporation price-consensus-eps-surprise-chart | LouisianaPacific Corporation Quote


Net sales of $852 million marginally topped the consensus estimate of $848 billion by 0.5% but declined 16% from the year-ago period.

Single-family housing starts fell 18.2% year over year, but multi-family starts rose 18.7%.

Segmental Analysis

Siding: The segment’s sales of $394 million were up 26% from the prior-year period. A 27% increase in Siding Solutions (formerly known as SmartSide) revenues, backed by a 16% rise in average net selling price and a 9% increased volume from the prior-year levels. The average net selling price benefited from list price increases and an improved mix of innovative products. Volume increased on the back of the ongoing ramp-up of the Houlton facility and increasing operational efficiency at other Siding facilities.

Adjusted EBITDA grew 24% to $90 million. Price and volume growth was offset by raw material, freight and labor inflation and facility maintenance costs.

OSB: Sales in the segment decreased 35% year over year to $388 million, owing to 39% lower OSB prices. Volume increased 5% year over year. The company’s adjusted EBITDA fell 70% year over year to $113 million due to lower prices, increased raw material and wage inflation and facility maintenance costs partially offset by higher sales volume and the incremental margin generated by Structural Solutions products.

South America: Sales of $53 million declined 30%. Adjusted EBITDA fell 62% from the year-ago quarter to $14 million due to lower OSB sales volume, higher raw material costs and unfavorable currency.

Operating Highlights

The gross margin contracted to 27.2% from 49.6% reported a year ago. Adjusted EBITDA of $200 million was down from the prior-year quarter’s figure of $480 million.


As of Sep 30, 2022, Louisiana-Pacific had cash and cash equivalents of $469 million compared with $358 million at the 2021-end. Long-term debt was in line with the 2021-level of $346 million.

For the third quarter, net cash provided by operations was $195 million, down from $511 million reported in the year-ago period.


For Fourth-quarter 2022, the company expects Siding Solutions’ revenue growth to be more than 30% from the year-ago period. OSB revenues are expected to be sequentially low by 30% (based on Random Lengths’ report published on Oct 28, 2022). It anticipates a consolidated adjusted EBITDA of $100 million.

For 2022, Louisiana-Pacific continues to expect Siding Solutions revenue growth of nearly 24%. Also, the company projects capital expenditures for 2022 to be $400-$420 million, indicating an increase from $254 million in 2021.

Zacks Rank & Some Recent Construction Releases

Louisiana-Pacific currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.

Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. However, sales declined from the year-ago quarter’s figure and lagged the consensus mark.

For 2022, OTIS expects adjusted net sales to be within $13.4-$13.5 billion, lower than the $13.6-$13.8 billion projected earlier. Adjusted earnings per share are anticipated to be $3.11-$3.15, suggesting 5-7% year-over-year growth. This is down from the prior projection of $3.17-$3.21 per share.

PulteGroup Inc. (PHM - Free Report) reported unimpressive results in third-quarter 2022. Quarterly earnings and revenues missed their respective Zacks Consensus Estimate thanks to prevailing industry headwinds. Nonetheless, the metrics increased on a year-over-year basis.

For fourth-quarter 2022, PHM expects ASP within $560,000-$570,000, indicating an increase from $490,000 registered a year ago. It expects home deliveries to be 8,000, indicating a decline from 8,611 homes delivered a year ago. The decrease reflects the challenging sales environment, higher cancelation rates and the ongoing impact of Hurricane Ian on Florida operations.

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