Home Uncategorized Louisiana Pacific (LPX) To Post Lower Q3 Earnings: Here’s Why

Louisiana Pacific (LPX) To Post Lower Q3 Earnings: Here’s Why


Louisiana-Pacific Corporation LPX is scheduled to be announced third quarter of 2022 results on November 1, before the market opens.

In the most recent reported quarter, the company’s revenue and earnings missed the Zacks Consensus Estimate by 4.3% and 10.5%, respectively. Profit and revenue fell 9.5% and 3% compared to the reported figures for the year-ago quarter, respectively.

It should be noted that earnings have exceeded the consensus estimate in nine of the last 10 quarters.

Trend in estimates

The Zacks Consensus Estimate for Louisiana-Pacific is pegged at $1.62 per share for the third quarter, indicating a 58.1% year-over-year decline. The consensus revenue estimate is $847.81 million, representing a 30.5% year-over-year decline.

LouisianaPacific Corporation Price and Earnings Surprise

LouisianaPacific Corporation price eps surprise | Quote from LouisianaPacific Corporation

Factors to consider

Louisiana-Pacific’s third-quarter earnings and sales are expected to decline year-over-year due to supply chain issues and inflationary pressures, primarily related to materials and labor. Additionally, increased costs for transporting logs to mills and higher marketing costs likely put pressure on margins in the third quarter.

LPX is forecasting consolidated adjusted EBITDA for the reported quarter of nearly $200 million, well below the $522 million it reported a year ago.

However, a solid siding business, stronger demand for specialty products and a focus on accelerating strategic transformation likely contributed to growth in the reportable quarter. In addition, strategic business transformation, efficient cash management and inorganic moves add positives for LPX and its peer company, Floor & Decor Holdings, Inc. FND.

Louisiana-Pacific forecasts Siding Solutions revenue to grow more than 20% year-over-year. The consensus estimate for net sales for the Siding segment is $374 million, representing a 19.9% ​​improvement over last year’s figure.

Meanwhile, LPX expects OSB to reflect lower prices and stronger inflation in the reporting quarter. The company expected OSB revenues to be down 40% sequentially (based on a Random Lengths report published on August 5, 2022).

The consensus estimate for OSB is pegged at $373 million, down 37.8% from $600 million the previous year. Ditto for the South America segment, with net sales pegged at $72 million, down 5.3% from $76 million in the prior year.

What the Zacks Model Says

Our tested model does not allow us to unambiguously predict the earnings of the Louisiana-Pacific region this time. A combination of positive Profit ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of higher returns, which is not the case here. You can find the best stocks to buy or sell before they are announced in our ESP income filter.

LPX currently has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -3.29%.

You see a complete list of today’s Zacks #1 Rank stocks here.

About FND

Based in Atlanta, Georgia, Floor and decor operates as a multi-channel specialist retailer and commercial distributor of hard flooring and related accessories. The company has benefited from its growth strategy, successfully turning a profit despite near-term macroeconomic challenges such as inflationary costs, rising mortgage rates and declining existing home sales.

FND currently has a Zacks Rank #3. At the same time, the expected growth rate of FND’s profit will be 11.1% in 2022 and 28.4% in 2023.

Promotions with a profitable combination

Here are two companies in the Zacks Construction a sector that, according to our model, has the right combination of elements to beat earnings in the respective quarters to be reported.

Based in Winchester, Virginia, Trex, Inc. TREX — which makes and distributes decking, railings, outdoor furniture and accessories — beat earnings estimates for each of the past four quarters, with an average surprise of 10.8%.

TREX is poised to beat expectations when it reports third-quarter 2022 results after the market closes on Oct. 31. It currently has a Zacks Rank #3 and an Earnings ESP of +25.62%.

Continued investment by customers in improving outdoor living likely contributed to the company’s quarterly performance. Favorable pricing/mix and focus on cost reduction and production efficiency efforts add positives.

Headquartered in Dothan, Alabama, Construction Partners, Inc. THE ROAD is a civil infrastructure company. Organic and inorganic growth opportunities in the attractive Southeastern US road construction/repair market are expected to drive the company’s growth. It has missed earnings estimates in three of the past four quarters and met once, with an average negative surprise of 75.6%.

ROAD is poised to beat expectations when it reports results for the fourth quarter of fiscal 2022. It currently has a Zacks Rank #3 and an Earnings ESP of +8.00%.

Strong demand for infrastructure services in end markets in both private and public sectors, consistent business model execution and growth strategy focused on operational performance and efficient project execution are likely to have contributed to the company’s quarterly performance.

Stay tuned for future earnings announcements with help Zacks Earnings Calendar.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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