Latest news with #Siding
Yahoo
07-05-2025
- Business
- Yahoo
Louisiana-Pacific Corp (LPX) Q1 2025 Earnings Call Highlights: Siding Growth and OSB Challenges
Q : Congrats on a strong quarter in Siding. Can you talk about the key drivers for this out-performance versus single-family starts? How is the R&R demand holding up? A : We saw strength across our entire order file, particularly in shed orders compared to last year. The R&R sector showed improvement, evidenced by the volumes of ExpertFinish sold. Our new construction and two-step distribution business also held up well. The company faces challenges from inflationary pressures and potential impacts on margins, particularly in the OSB segment. OSB segment experienced a mix shift from structural solutions to commodity, resulting in a net reduction of $13 million in revenue and $7 million in EBITDA. The EBITDA impact of tariffs in the first quarter was about $2 million for Siding, with an expected $12 million impact for the full year if current tariffs persist. Tariff uncertainty has weakened consumer sentiment and contributed to a 6% decline in single-family starts in the first quarter. The company is seeing strong order files and expects record volume and revenue for Siding in the second quarter. Siding business delivered a 26% EBITDA margin in the first quarter, with expectations for similar performance in the second quarter. The company introduced new specialized products, such as the two-tone ExpertFinish products, which have received enthusiastic customer responses. For the complete transcript of the earnings call, please refer to the full earnings call transcript . Story continues Q: How do you feel about inventories in the channel given the uncertainty around tariffs and the macro backdrop? A: Home center inventories were pulled down in Q1, but are now normal. Channel inventories are seasonally appropriate. We are prompt on our Siding order file, allowing distributors to get shipments in two to three weeks, so there's no need for them to build inventory. Q: In terms of your Siding margin, how should we think about the progression of that margin in the back half of the year and into 2026? A: We always provide a safe forecast. The non-materialization of inflationary fears and the way the order file is progressing suggest potential margin expansion in 2026. The Houlton expansion won't impact profits until at least 2027. Q: With OSB capacity being added, what are your thoughts on shifting more towards value-add over commodity OSB? A: The competitive dynamics are challenging due to weaker housing markets and new capacity. However, we remain bullish on OSB long-term. Our focus is on growing Siding and converting facilities when possible, while maintaining optionality in the OSB business. Q: How much of the success in your order file reflects marketing investments? A: The investment in repair and remodel, particularly with ExpertFinish, has been ongoing since post-COVID. We're seeing returns from this investment, especially in the R&R sector. Marketing is less of a factor in new construction, where direct engagement with builders is key. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
19-02-2025
- Business
- Yahoo
Louisiana-Pacific to Post Q4 Earnings: What's in Store for the Stock?
Louisiana-Pacific Corporation LPX is scheduled to report fourth-quarter 2024 results on Feb. 19, before market the last reported quarter, the company's earnings and net sales beat the Zacks Consensus Estimate by 38.6% and 3.2%, respectively. However, both metrics declined 20.7% and 0.8%, respectively, on a year-over-year company's earnings surpassed the consensus mark in each of the trailing four quarters, with an average of 30.7%. The Zacks Consensus Estimate for Louisiana-Pacific's fourth-quarter earnings per share (EPS) is pegged at 79 cents, which increased 5 cents in the past 30 days. This indicates an increase of 11.3% from 71 cents reported a year ago. Louisiana-Pacific Corporation price-eps-surprise | Louisiana-Pacific Corporation Quote The consensus estimate for net sales is pegged at $664.4 million, indicating an increase of 1% from $658 million in the year-ago quarter. Louisiana-Pacific's fourth-quarter top line is expected to have increased year over year, driven by strength in the Siding business. Increased penetration of Siding products in repair/remodel and the rollout of SmartSide products are likely to have supported growth. The Siding unit, which accounted for 54.4% of sales in the third quarter, has been witnessing solid demand despite macroeconomic challenges and a slow housing market. Siding is less sensitive to housing market cyclicality as more than 50% of Siding Solutions demand comes from other markets like sheds, and repair and R&R spending remained slightly lower in the last quarter compared with the prior year, the outlook has improved. Growth in new construction and repair/remodel is expected to have contributed to Louisiana-Pacific's top ongoing growth and margin expansion in Siding is expected to have offset the timing issue. LPX expects Siding Solutions' revenues to have grown 9-10% year over year, reaching approximately $365 million. Also, continued strength in the Siding order file is likely to have supported growth in the fourth quarter. The consensus estimate for the Siding segment's net sales is pegged at $370 million, indicating an improvement from the year-ago reported figure of $332 the challenging price environment in the Oriented Strand Board ('OSB') segment (accounted for 32.8% of sales), along with lumber market swings, is likely to have impacted the company's top line. The company expects typical seasonal downtime to have impacted OSB volumes in the fourth consensus estimate for the OSB segment's net sales is pegged at $249 million, implying a decline from $272 million in the prior year. The consensus mark for the South America segment's net sales is pegged at $58 million, indicating an increase from $52 million in the prior year. The bottom line of Louisiana-Pacific is likely to have been improved year over year on the back of solid execution of its strategy to drive growth, margin, specialization and efficiency. However, high operational costs due to incremental investments in sales and marketing are expected to have kept the company's margins under pressure in the to-be-reported anticipates a consolidated adjusted EBITDA of $85-$105 million, down from $129 million reported a year ago. Of this, $70-$80 million is likely to be contributed by Siding. Assuming prices stay flat at current levels, the company expects OSB EBITDA in the fourth quarter to be between $15 million and $25 consensus mark for adjusted EBITDA for the Siding segment is pegged at $85 million, up from $72 million reported in the year-ago quarter. Meanwhile, the same for OSB is pegged at $41 million, down from $59 million in the prior-year quarter. Our proven model predicts an earnings beat for Louisiana-Pacific this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case ESP of LEG: Louisiana-Pacific has an Earnings ESP of +21.14% at present. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Zacks Rank: Louisiana-Pacific currently carries a Zacks Rank #3. Here are some other companies in the Zacks Construction sector, which, too, according to our model, have the right combination of elements to beat on earnings in their respective quarters to be Inc. FTDR currently has an Earnings ESP of +60.00% and a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks earnings for the fourth quarter of 2024 are expected to decline 45%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 269%.Trex Company, Inc. TREX has an Earnings ESP of +20.00% and a Zacks Rank of reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 9%. The company's earnings for the fourth quarter of 2024 are expected to decrease 75%.TopBuild Corp. BLD currently has an Earnings ESP of +1.28% and a Zacks Rank of earnings for the fourth quarter of 2024 are expected to increase 8.3%. The company reported better-than-expected earnings in the trailing three out of four quarters and missed once, the average surprise being 1%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Louisiana-Pacific Corporation (LPX) : Free Stock Analysis Report Trex Company, Inc. (TREX) : Free Stock Analysis Report TopBuild Corp. (BLD) : Free Stock Analysis Report Frontdoor Inc. (FTDR) : Free Stock Analysis Report To read this article on click here. 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