Louisiana-Pacific Corporation LPX or LP, reported impressive fourth-quarter 2023 results. Earnings and net sales beat their respective Zacks Consensus Estimate.
On a year-over-year basis, earnings increased despite net sales decline on lower costs and reduced inflationary pressure. LPX’s shares gained 2.1% on Feb 14.
Detailed Discussion
Louisiana-Pacific reported adjusted earnings per share (EPS) of 71 cents, beating the Zacks Consensus Estimate of 52 cents by 36.5%. The bottom line increased 16.4% from the year-ago quarter’s reported figure of 61 cents per share on the back of strong adjusted EBITDA.
Net sales of $658 beat the consensus estimate of $624 million by 5.5% but declined 7% from the prior year’s figure of $705 million, owing to lower Siding sales.
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
Louisiana-Pacific Corporation Price, Consensus and EPS Surprise
Single-family housing starts rose to 236 from the 193 units reported in the year-ago period. Multi-family starts were down to 98 units from 134 units reported a year ago.
Adjusted EBITDA of $129 million was up 29% from the prior-year quarter’s level, backed by higher OSB selling prices and a decrease in inflationary costs (including freight, raw materials, and labor).
Segmental Analysis
Siding: The segment’s sales of $332 million were down 14% from the prior-year period. A 1% rise in the average net selling price (ASP) was offset by a 15% decrease in volume from prior-year levels. The ASP benefited from list price increases, but volume reduced on challenging new and existing home selling markets as well as record results in the comparable year-ago period.
Adjusted EBITDA came in at $72 million, a 19% decline from $88 million reported a year ago.
OSB: Sales in the segment increased 6% year over year to $272 million, owing to an increase of 9% in OSB prices. This was partially offset by a 3% decrease in sales volume.
The company’s adjusted EBITDA grew a whopping 362% year over year to $59 million due to higher commodity selling prices, decrease in inflationary costs, and reduced mill-related costs.
South America: Sales of $52 million increased 3% on higher volumes offset by lower ASP. Adjusted EBITDA plunged 10% from the year-ago quarter to $11 million.
2023 Highlights
For the year, net sales amounted to $2.6 billion, down 33% from 2022. Siding Solutions’ net sales growth of 26% was offset by a 14% decline in OSB.
Adjusted EPS came in at $3.22, down from $11.77 reported in 2022. Adjusted EBITDA for the year summed up to $478 million, down 34.4% from the 2022 number.
Financials
At 2023-end, LP had more than $770 million in liquidity. As of Dec 31, 2023, Louisiana-Pacific had cash and cash equivalents of $222 million compared with $369 million at 2022-end. Long-term debt was $347 million compared with the 2022-end level of $346 million.
For 2023, net cash provided by operations was $316 million, down from $1.14 billion reported at the end of 2022.
At 2023-end, $200 million shares remained under the share repurchase program authorized in May 2022.
Guidance
For the first quarter of 2024, the company expects Siding Solutions’ revenues to grow 3-5% from the year-ago period. It anticipates a consolidated adjusted EBITDA of $130-$145 million, of this $65-$70 million is likely to be contributed by Siding, and $65-$75 million is likely to be added by OSB.
For 2024, the company expects Siding Solutions’ revenues to rise 8-10% from 2023. LPX projects a consolidated adjusted EBITDA of $495-$525 million, of this $280-$300 million is likely to be contributed by Siding, and $215-$225 million is likely to be added by OSB.
LPX anticipates capital expenditures between $200 million and $220 million.
Zacks Rank & Recent Construction Releases
Louisiana-Pacific currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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