Why Is Louisiana-Pacific (LPX) Down 12.9% Since Last Earnings Report?

Core Viewpoint - Louisiana-Pacific's recent earnings report indicates a decline in performance, with adjusted earnings surpassing estimates but showing a significant year-over-year decrease, while net sales fell short of expectations and decreased compared to the previous year [3][5]. Earnings Overview - In Q4 2025, adjusted earnings per share (EPS) were three cents, exceeding the Zacks Consensus Estimate of a loss of six cents by 150%, but down 97.1% from an adjusted EPS of $1.03 in the previous year [5]. - Consolidated net sales were $567 million, missing the consensus estimate of $603 million by 6% and declining 16.7% from $681 million year-over-year, primarily due to lower OSB prices and reduced sales volumes [5]. Segment Performance - Siding segment net sales increased by 6% year-over-year to $384 million, driven by higher sales volumes and prices, with adjusted EBITDA growing 33% to $97 million [6]. - OSB segment net sales fell 49% to $136 million, resulting in an adjusted EBITDA loss of $39 million, compared to a $50 million profit the previous year [6]. Margins and Profitability - Gross profit decreased by 47.5% year-over-year to $85 million, with gross margin compressing by 880 basis points to 15% [7]. - Adjusted EBITDA dropped to $50 million, down 60% from $125 million last year, with an adjusted EBITDA margin of 8.8%, a decline of 960 basis points [7]. Balance Sheet and Shareholder Returns - As of 2025, Louisiana-Pacific had cash and cash equivalents of $292 million, down from $340 million in 2024, with total liquidity at $1.1 billion [8]. - The company invested $291 million in capital expenditures, paid $78 million in dividends, and repurchased 0.6 million shares for $61 million during 2025 [8]. Q1 & 2026 Outlook - For Q1 2026, Siding net sales are expected to be between $350 million and $355 million, approximately down 12% year-over-year, with adjusted EBITDA projected between $80 million and $85 million [10]. - For the full year 2026, Siding net sales are anticipated to be about $1.7 billion, nearly 2% growth year-over-year, with adjusted EBITDA expected to be around $450 million [11]. Estimate Trends - Following the earnings release, there has been a downward trend in estimates, with the consensus estimate shifting down by 92.22% [12]. VGM Scores - Louisiana-Pacific currently holds a subpar Growth Score of D and a Momentum Score of F, while achieving a C on the value side, placing it in the middle 20% for this investment strategy [13]. Overall Outlook - The overall trend in estimates has been downward, leading to a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [14].