Louisiana-Pacific (LPX) Q1 Earnings & Sales Miss, Grow Y/Y

Louisiana-Pacific Corporation (NYSE:LPX) posted first quarter of 2018 results wherein earnings and revenues fell shy of the Zacks Consensus Estimate.

The company reported adjusted earnings per share of 63 cents in the quarter, missing the consensus mark of 71 cents by 11.3%. Earnings improved considerably by 65.8% from the year-ago quarter’s figure of 38 cents. The upside can be attributed to higher oriented strand board (OSB) prices and the strong performances in engineered wood products and South American operations. However, the recent rail transportation system issues in Canada, caused by unplanned downtime at its operations, increased inventory and late shipments.

Net sales of $691.3 million in the quarter failed to meet the consensus mark of $698 million by 1%. Net sales increased 13% year over year.

Adjusted EBITDA from continuing operations was $159 million in the quarter, up 39.5% from $114 million in the prior-year quarter.

Segmental Analysis

OSB: Sales at the OSB segment increased 16.8% year over year to $313 million. In the first quarter, adjusted EBITDA increased 48.7% from the first quarter of 2017.

Beginning this quarter, the company will report OSB commodity sales and value-add sales separately. Sales volumes of commodity OSB products were 2% higher, while the same for its value-added products were 2% lower, on a year-over-year basis. Meanwhile, pricing for OSB was 18% higher for commodity products and 15% for value-added products.

Siding Segment: This segment’s sales were up 6.1% to $227 million owing to 6% increase in SmartSide average sales prices, but volumes were lower by 4%.

In the quarter under review, the Siding segment recorded adjusted EBITDA of $54 million, reflecting an increase of $5 million from the first quarter of 2017.

Engineered Wood Products (EWP): EWP sales grew 23.2% year over year to $101 million in the quarter, owing to higher volumes of I-Joist (up 19%) and LVL products (4%).

Pricing increased 9% for LVL, 10% for LSL and 7% for I-Joists. Adjusted EBITDA increased $2 million from the prior-year quarter.

South America: This segment comprises facilities in Chile and Brazil. Segmental sales improved $5 million year over year to $42 million.

Adjusted EBITDA was $11 million compared with $7 million in first-quarter 2017.

Other: Net sales were $7.9 million in the quarter compared with $8.7 million a year ago.

Louisiana-Pacific Corporation Price, Consensus and EPS Surprise

Financials

Louisiana-Pacific ended the quarter with cash and cash equivalents of $895.7 million as of Mar 31, 2018 compared with $928 million as of Dec 31, 2017.

Zacks Rank & Other Peer Releases

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

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