Louisiana-Pacific Corp (LPX) Q3 2023 Earnings: Net Sales and Income Decline Amid Market Challenges
Net sales for Q3 2023 decreased by 15% to $728 million, primarily due to lower volumes partially offset by higher prices.
Income attributed to LPX from continuing operations decreased by $11 million to $118 million.
Adjusted EBITDA was $190 million, a decrease of $10 million from the previous year.
The company paid $49 million in capital expenditures and $17 million in cash dividends during Q3 2023.
On November 1, 2023, Louisiana-Pacific Corp (NYSE:LPX), a leading manufacturer of high-performance building products, reported its financial results for the third quarter of 2023. The company experienced a decrease in net sales and income due to lower volumes, partially offset by higher prices. Despite these challenges, LPX maintains a strong liquidity position and continues to invest in capital expenditures.
Financial Performance
For the third quarter of 2023, LPX reported a 15% decrease in consolidated net sales to $728 million, compared to the same period in 2022. This decrease was primarily due to lower volumes in the Siding and Oriented Strand Board (OSB) segments, partially offset by higher prices. Siding net sales decreased by 13% to $345 million, while OSB net sales decreased by 14% to $335 million.
Income attributed to LPX from continuing operations decreased by $11 million to $118 million. The income per diluted share also decreased by $0.11 to $1.63 per share. Adjusted EBITDA was $190 million, a decrease of $10 million from the previous year. The company's adjusted diluted EPS was $1.62 per share, a decrease of $0.10 per share.
Capital Allocation and Liquidity
During the third quarter, LPX paid $49 million in capital expenditures and $17 million in cash dividends. The company also declared a quarterly cash dividend of $0.24 per share. As of September 30, 2023, LPX had fully repaid all outstanding amounts under the Amended Credit Facility. The company reported cash and cash equivalents of $160 million and borrowing availability under its revolving credit facility of $550 million, resulting in total liquidity of approximately $710 million. Additionally, there is an availability of $200 million remaining under the share repurchase program authorized in May 2022.
Outlook
Looking ahead, LPX expects Siding full-year 2023 net sales to decrease year-over-year by approximately 10%. OSB fourth quarter 2023 net sales are expected to be sequentially lower than the third quarter 2023 by approximately 30%. Under these assumptions, fourth quarter 2023 Adjusted EBITDA is expected to be $60 million to $80 million. The company also anticipates capital expenditures for 2023 to be in the range of $280 million to $295 million.
CEO Commentary
As expected, Siding sales volume, price, and net sales all increased sequentially compared to the second quarter, and we believe Siding inventories have normalized, said Brad Southern, Chair and Chief Executive Officer. I want to thank all LP employees for their dedication and execution, and for the strong results they delivered in the third quarter.
Explore the complete 8-K earnings release (here) from Louisiana-Pacific Corp for further details.
This article first appeared on GuruFocus.
