Louisiana-Pacific (LPX) Up 6.4% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Louisiana-Pacific reported mixed Q3 2025 results, with adjusted earnings missing estimates while net sales exceeded expectations, indicating challenges in the OSB segment [2][3]. Earnings and Revenue Overview - Adjusted EPS was 36 cents, missing the Zacks Consensus Estimate of 37 cents by 2.7% and down 70% year over year from $1.22 [3]. - Consolidated net sales reached $663 million, surpassing the consensus mark of $656 million by 1.1%, but down 8.2% from $722 million a year ago, primarily due to lower OSB prices [3]. Segment Performance - Siding segment sales grew 5% year over year to $443 million, with adjusted EBITDA slightly declining to $117 million and a margin of 26% [4]. - OSB segment sales fell 29% to $179 million, resulting in an adjusted EBITDA loss of $27 million compared to a $33 million profit last year [4]. - LP South America reported sales of $39 million, down 17% year over year, with adjusted EBITDA halving to $5 million [4]. Margins and Profitability Metrics - Gross profit decreased 33% year over year to $129 million, with gross margin contracting by 440 basis points to 19.4% [5]. - Adjusted EBITDA fell to $82 million, down 46% from $153 million last year, with an adjusted EBITDA margin of 12.4% compared to 21.2% a year ago [5]. - Adjusted operating profit sharply declined to $18 million, representing an adjusted operating margin of 2.7% versus 16.1% in the prior-year period [5]. Balance Sheet & Shareholder Returns - As of September 30, 2025, LP had cash and cash equivalents of $316 million and total liquidity of $1.1 billion, with long-term debt at $348 million [6]. - The company invested $84 million in capital expenditures and paid $19 million in dividends, with no share repurchases during the quarter [6]. Q4 & 2025 Outlook - For Q4 2025, LP anticipates Siding net sales of nearly $370 million (up 3%) and adjusted EBITDA of approximately $82 million (22% margin) [7]. - For the full year 2025, guidance includes Siding adjusted EBITDA of about $430 million (26% margin) and consolidated adjusted EBITDA of nearly $420 million [8]. Estimate Trends - Recent estimates have shown a downward trend, with the consensus estimate shifting down by 61.29% [9]. VGM Scores - Louisiana-Pacific has a Growth Score of B but lags in Momentum with a D and Value with a D, resulting in an aggregate VGM Score of C [10]. Industry Performance - Louisiana-Pacific is part of the Zacks Building Products - Wood industry, where Boise Cascade has gained 5% over the past month, despite reporting a year-over-year revenue decline of 2.7% [12].