Louisiana-Pacific Corporation (LPX) reported adjusted earnings per share (EPS) of 41 cents from continuing operations in the first quarter of 2013, in line with the Zacks Consensus Estimate. Earnings also turned around significantly from the prior-year quarter loss of 6 cents attributable to improved pricing in the OSB segment and increasing demand for LPX products.
Net sales in the quarter improved 48.6% year over year to $538 million, owing to volume and price increase at OSB. Revenues, however, lagged the Zacks Consensus Estimate of $544 million by 1.1%.
Adjusted earnings before interest, taxes, depreciation and amortization (:EBITDA) from continuing operations were $121 million versus $21 million in the prior-year quarter, driven by a significant increase in net sales.
Oriental Strand Board (:OSB): Sales in the segment surged 92.6% to $287 million in the quarter, driven by 82% increase in pricing. Improved housing start also resulted in volume growth of 12% for the segment. The segment recorded adjusted EBITDA of $109 million, much higher than $11.0 million in the prior-year quarter, attributable to pricing benefits.
Composite Wood Products/Siding: Sales in the Siding segment improved 18% to $134 million benefiting from improved pricing and SmartSide volumes in the quarter. Driven by the improvement in housing start and penetration in retail, repair and remodel markets and sheds, SmartSide volumes improved 21% year over year. On the other hand, CanExel siding volume was down 14%, owing to a bitter winter in Eastern Canada. The segment recorded adjusted EBITDA of $25 million in the quarter, up 19% from the prior-year quarter.
Engineered Wood Products (EWP): Engineered Wood Products sales increased 28.6% year over year to $63 million in the quarter. Owing to improving housing demand, volumes of I-Joists were up 35% and volumes of LVL and LSL were up 13% year over year. Pricing was up 5% in I-Joists and remained flat in LVL and LSL due to changes in product mix. The segment reported breakeven EBITDA, flat year over year.
South America: The segment manufactures OSB structural panels and siding products in Chile and Brazil. Segment sales grew 6% to $45 million. Volumes in Chile and Brazil were flat year over year. Driven by changes in foreign exchange rates, prices increased 7% in Chile and 3% in Brazil. In terms of local currency, however, prices improved 3% in Chile and 16% in Brazil. The segment’s adjusted EBITDA of $9 million was higher than $6 million in the prior-year quarter.
Louisiana-Pacific is optimistic about the housing market recovery and believes that the company is well prepared to meet the resulting extra demand.
Louisiana-Pacific carries a Zacks Rank #1 (Strong Buy).
Some other companies that are doing well and deserve a mention include Potlatch Corporation (PCH), Weyerhaeuser Co. (WY) and Universal Forest Products Inc. (UFPI). Potlatch Corporation carries a Zacks Rank #1 whereas Weyerhaeuser and Universal Forest Products carry a Zacks Rank #2 (Buy).
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