Louisiana-Pacific's Loss Narrows - Analyst Blog

Louisiana-Pacific Corporation (LPX) showed a narrower loss of $12 million or 9 cents per share (adjusted) in the third quarter of 2010 compared with $13 million or 12 cents per share in the same quarter of prior year and the Zacks Consensus Estimate of 11 cents per share. This was attributable to a transition in the housing market during the quarter.

Net Sales in the quarter inched up 4% to $322.5 million. The company had a wider operating loss of $15.9 million (5% of sales) compared with $8.1 million (3% of sales) in the third quarter of 2009.

Net sales in the Oriented Strand Board segment went up 14% to $139.5 million. The segment reported an $800,000 decline in operating loss to $5 million during the quarter. Net sales in the Siding segment dipped 8% to $104.5 million. The segment had an operating income of $9.3 million, almost halved from $16.1 million in the year-ago quarter.

Net sales in the Engineered Wood Products segment slashed 21% to $37.9 million. Operating loss decreased by $1.3 million to $4.9 million in the third quarter of 2010.

Louisiana-Pacific had cash and cash equivalents of $382.1 million as of September 30, 2010 compared with $394.1 million as of December 31, 2009. Long-term debt stood at $712.8 million in the period under review. This translated into a long-term debt-to-capitalization ratio of 36%, down 2 percentage points from 2009-end.

In the first nine months of the year, the company's cash flow from operations improved to $45 million from $33.1 million in the same period of 2009, primarily due to narrower loss during the period under study. Capital expenditure went up to $11.5 million from $6.7 million in the first nine months of 2009.

Nashville, Tennessee-based Louisiana-Pacific, a Zacks #3 Rank (Hold) 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.