Earnings Preview: Louisiana-Pacific

Louisiana-Pacific (NYSE:LPX) is expected to report Q3 earnings before market open Tuesday, November 4, with a conference call scheduled for 11:00 am ET.


The consensus estimate is loss (30c) for EPS and $394.06M for revenue, according to First Call. Shares of lumber and wood products companies fell Monday morning and then traded mixed into afternoon trade, after a government report showed a weak housing market in September contributed to another monthly decline in construction spending.

Analyst Views

Also, effecting the names was comments from the Goldman Sachs analyst that warned that the paper and forest products companies' operating rates may decline because of weak demand. The lower the operating rate, or utilization rate, of a company's facilities the less efficiently that facility is running and, thus, the more it weighs on earnings. The firm also reiterated a "Cautious" view of the sector because it does not foresee "industry operating rates rising sufficiently to drive prices higher and the sector has not historically performed well heading into economic downturns."

Oppenheimer, overall, is looking for better results this quarter for the group relative to the previous quarter. Specifically, Opco is estimating LP to report a loss (16c) for Q3, and expect earnings for the company to be helped by higher OSB prices, which were up 12% QoQ, and the weaker Canadian dollar. Opco estimates that LP will burn US $14M of cash in Q3 (excluding acquisitions and unusual payments), which represents roughly US 14c per share. The firm rates the shares Sector Outperform and says it is one of the firm's top three names in the group.

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Tagged: , Lumber, Wood Production, Earnings, SA Submit
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