Louisiana-Pacific Corporation (LPX) reported a loss of $59 million or 44 cents per share from continuing operations in the third quarter of 2011, much wider than the loss of $31 million or 23 cents per share in the year-ago quarter.
The third quarter results included an after-tax non-cash charge of $38 million or 28 cents per share related to the impairment of Louisiana-Pacific’s laminated strand lumber (LSL) facility. Excluding the charge, the company’s loss stood at $21 million or 16 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents.
Despite a weak housing environment, poor demand for houses, rising inventories, high unemployment and lower consumer confidence, net sales of the company increased 9% year over year to $350.6 million. Reported sales were also higher than the Zacks Consensus Estimate of $335.0 million.
Operating loss in the reported quarter widened significantly to $73 million from $16 million in the prior-year quarter.
Net sales from the Oriented Strand Board segment rose marginally to $138.8 million from $140.1 million in the prior-year quarter. The benefits derived from a 5% growth in sales volumes was largely mitigated by a 7% decline in sales price. The segment operating loss deteriorated to $16.0 million from $5.0 million in the third quarter of 2010.
The Siding segment generated net sales of $112.0 million, up 7.1% from $104.6 million in the prior-year quarter. The year-over-year increase in sales was driven by the ongoing improvement in retail performance and slightly higher housing starts. Operating income in the segment was $11.8 million compared with $9.3 million a year ago.
Net sales in the Engineered Wood Products segment surged 44.5% to $54.9 million from $38.0 million a year ago. Operating loss improved to $3.2 million from $4.9 million in the corresponding quarter of 2010, mainly on the back of increased export volumes and improved operations at the LSL facility.
Louisiana-Pacific had cash and cash equivalents of $360.1 million as of September 30, 2011 compared with $389.3 million as of December 31, 2010. Long-term debt stood at $716.2 million at the end of the third quarter of 2011 versus $714.5 million at the end of the fourth quarter of 2010. Inventories piled up to $156.0 million as of September 30, 2011 as against $151.9 million as of December 31, 2010.
In the first nine months of the year, the company had cash outflows of $33.8 million from operating activities compared with inflows of $45.0 million in the year-ago period, primarily due to higher loss and operating credits and charges. Meanwhile, capital expenditures increased to $13.4 million in the first three quarters from $11.5 million in the year-ago period.
Nashville, Tennessee-based Louisiana-Pacific, a Zacks #3 Rank (Sell rating) stock, manufactures and distributes building products for new home construction, repair and remodeling, manufactured housing, and light industrial and commercial construction.
The company offers its products to retail home centers, manufactured housing producers, distributors, wholesalers and building materials dealers in North America, South America, Asia and Europe. Louisiana-Pacific’s key competitors include Universal Forest Products Inc. (UFPI) and Weyerhaeuser Co. (WY).
LOUISIANA PAC (LPX): Free Stock Analysis Report
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