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Louisiana-Pacific (LPX) Q2 Earnings Lag Estimates, Sales Top
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Louisiana-Pacific Corporation (LPX - Free Report) posted lower-than-expected earnings in the second quarter of 2017 in spite of improved demand for products and higher Oriented Strand Board or OSB pricing. Siding and Engineered Wood Product (EWP) generated higher revenues with improved pricing.
The company reported adjusted earnings per share of 58 cents in the second quarter of 2017, missing the Zacks Consensus Estimate of 61 cents by 4.9%. Earnings improved considerably from the year-ago quarter’s 28 cents.
Net sales of $694.1 million in the quarter surpassed the Zacks Consensus Estimate of $684.1 million by 1.5%. Also, net sales increased 19% year over year.
Adjusted EBITDA from continuing operations was $164 million in the quarter, up 65.6% from $99 million in the prior-year quarter. Adjusted EBITDA and operating results improved by $71.0 million on higher OSB pricing in North America.
Segmental Analysis
OSB: Sales at the OSB segment increased 28.6% year over year to $325 million.
In the second quarter, adjusted EBITDA was $118 million, up 29% year over year.
Sales volumes remained flat year over year, while sales prices increased 26%, driving favorable growth in operating results and lifting adjusted EBITDA by $68 million.
Siding Segment: The segment manufactures products under two categories — SmartSide siding products and related accessories, and CanExel siding line with a limited amount of OSB. These products are used for new constructions, repair and remodeling, and outdoor structures such as shed.
This segment’s sales were up 11.6% to $231 million on a 5% increase in SmartSide average sales prices and 3% rise in volumes.
In this quarter, the Siding segment recorded adjusted EBITDA of $56 million, 14% higher from the prior-year quarter.
Engineered Wood Products (EWP): The EWP segment makes I-Joists (IJ), laminated veneer lumber (LVL), laminated strand lumber (LSL) and other related products. These products are used in residential and commercial flooring and roofing systems.
Engineered Wood Products sales grew 21% year over year to $94 million in the quarter. Volumes of I-Joist LSL and LVL increased 11% from the prior-year quarter.
Pricing increased 4% for LVL and LSL and 3% for I-Joists. Adjusted EBITDA was $9 million, compared with $4 million in second-quarter 2016.
South America: This segment comprises facilities in Chile and Brazil. Segment sales declined 2.4% year over year to $39 million.
Volumes decreased 17% in Chile owing to lower demand in the local market, while it increased 24% in Brazil on higher export sales. However, on a U.S. dollar basis, pricing was up 2% in Chile and 1% in Brazil.
Adjusted EBITDA of $8 million reflected marginal deterioration from $9 million in the second quarter of 2016.
Other: Net sales were $7.1 million in the quarter, compared with $6.6 million a year ago.
2017 Outlook
The company expects to continue with sustainable improvement projects including consistent siding growth and instigation of new specialty products in the second half of 2017. The year-over-year increase in single-family starts raises hopes of a profitable second half for the company despite the constraints of labor shortage and lot availability.
Capital expenditures are projected in the $175–$200 million range, of which $125 million is allocated for growth projects and $75 is for maintenance projects.
The company expects to start paying cash taxes in 2017.
Masco Corporation’s (MAS - Free Report) adjusted earnings of 50 cents per share in the second quarter of 2017 were in line with the Zacks Consensus Estimate. Adjusted earnings increased 30.4% year over year.
D.R. Horton, Inc. (DHI - Free Report) exhibited a stellar performance in the third quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.3% and 5.2%, respectively.
NVR, Inc. (NVR - Free Report) reported second-quarter 2017 earnings of $35.19 per share, surpassing the Zacks Consensus Estimate by 22.9%. The reported figure also improved 59.8% from the year-ago level.
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
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Louisiana-Pacific (LPX) Q2 Earnings Lag Estimates, Sales Top
Louisiana-Pacific Corporation (LPX - Free Report) posted lower-than-expected earnings in the second quarter of 2017 in spite of improved demand for products and higher Oriented Strand Board or OSB pricing. Siding and Engineered Wood Product (EWP) generated higher revenues with improved pricing.
The company reported adjusted earnings per share of 58 cents in the second quarter of 2017, missing the Zacks Consensus Estimate of 61 cents by 4.9%. Earnings improved considerably from the year-ago quarter’s 28 cents.
Net sales of $694.1 million in the quarter surpassed the Zacks Consensus Estimate of $684.1 million by 1.5%. Also, net sales increased 19% year over year.
Adjusted EBITDA from continuing operations was $164 million in the quarter, up 65.6% from $99 million in the prior-year quarter. Adjusted EBITDA and operating results improved by $71.0 million on higher OSB pricing in North America.
Segmental Analysis
OSB: Sales at the OSB segment increased 28.6% year over year to $325 million.
In the second quarter, adjusted EBITDA was $118 million, up 29% year over year.
Sales volumes remained flat year over year, while sales prices increased 26%, driving favorable growth in operating results and lifting adjusted EBITDA by $68 million.
Siding Segment: The segment manufactures products under two categories — SmartSide siding products and related accessories, and CanExel siding line with a limited amount of OSB. These products are used for new constructions, repair and remodeling, and outdoor structures such as shed.
This segment’s sales were up 11.6% to $231 million on a 5% increase in SmartSide average sales prices and 3% rise in volumes.
In this quarter, the Siding segment recorded adjusted EBITDA of $56 million, 14% higher from the prior-year quarter.
Engineered Wood Products (EWP): The EWP segment makes I-Joists (IJ), laminated veneer lumber (LVL), laminated strand lumber (LSL) and other related products. These products are used in residential and commercial flooring and roofing systems.
Engineered Wood Products sales grew 21% year over year to $94 million in the quarter. Volumes of I-Joist LSL and LVL increased 11% from the prior-year quarter.
Pricing increased 4% for LVL and LSL and 3% for I-Joists. Adjusted EBITDA was $9 million, compared with $4 million in second-quarter 2016.
South America: This segment comprises facilities in Chile and Brazil. Segment sales declined 2.4% year over year to $39 million.
Volumes decreased 17% in Chile owing to lower demand in the local market, while it increased 24% in Brazil on higher export sales. However, on a U.S. dollar basis, pricing was up 2% in Chile and 1% in Brazil.
Adjusted EBITDA of $8 million reflected marginal deterioration from $9 million in the second quarter of 2016.
Other: Net sales were $7.1 million in the quarter, compared with $6.6 million a year ago.
2017 Outlook
The company expects to continue with sustainable improvement projects including consistent siding growth and instigation of new specialty products in the second half of 2017. The year-over-year increase in single-family starts raises hopes of a profitable second half for the company despite the constraints of labor shortage and lot availability.
Capital expenditures are projected in the $175–$200 million range, of which $125 million is allocated for growth projects and $75 is for maintenance projects.
The company expects to start paying cash taxes in 2017.
Zacks Rank & Peer Releases
Louisiana-Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 ( Strong Buy) Rank stocks here.
Masco Corporation’s (MAS - Free Report) adjusted earnings of 50 cents per share in the second quarter of 2017 were in line with the Zacks Consensus Estimate. Adjusted earnings increased 30.4% year over year.
D.R. Horton, Inc. (DHI - Free Report) exhibited a stellar performance in the third quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.3% and 5.2%, respectively.
NVR, Inc. (NVR - Free Report) reported second-quarter 2017 earnings of $35.19 per share, surpassing the Zacks Consensus Estimate by 22.9%. The reported figure also improved 59.8% from the year-ago level.
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise | Louisiana-Pacific Corporation Quote
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without.
Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future. Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>