Louisiana-Pacific Shares Slip Post Q2 Results

Louisiana-Pacific Corp LPX reported a second-quarter FY22 sales decline of 3% year-on-year to $1.13 billion, missing the consensus of $1.25 billion.
The gross margin contracted by 1,272 bps to 45.8%. The operating income decreased 27.1% Y/Y to $462 million with an operating margin of 40.9%, down by 1,240 bps.
Adjusted EPS, including discontinued operations, was $4.57, and adjusted EPS from continuing operations was $4.19.
Adjusted EBITDA decreased 26.2% Y/Y to $491 million, and margin fell by 1,350 bps to 43.5%.
Louisiana-Pacific generated cash from operating activities year-to-date of $908 million, compared to $772 million a year ago. It had cash and equivalents of $517 million as of June 30, 2022.
During the quarter, LPX paid $471 million to repurchase 7.3 million of its common shares.
"Despite ongoing raw material inflation and logistics challenges, LP's teams consistently executed our strategy to meet sustained customer demand," commented LP Chair and CEO Brad Southern.
3Q22 Outlook: Louisiana-Pacific expects Siding Solutions revenue growth of ~20%. OSB revenue is expected to be sequentially lower than Q2 by ~40%, assuming that OSB prices published by Random Lengths remain unchanged from those posted on August 5, 2022.
It expects an Adjusted EBITDA of ~$200 million.
For FY22, LPX expects Siding Solutions' full-year revenue growth to be greater than 20%.
The company expects capital expenditures of $400 million - $430 million.
Price Action: LPX shares are trading lower by 6.12% at $58.80 on the last check Tuesday.

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