LP discusses a downhill quarter

Louisiana-Pacific Corporation (LP) managed to find cause for optimism despite sustaining decreases in revenue and income in the third quarter.

“All of LP’s operating segments were adjusted EBITDA positive in the third quarter," said CEO Curt Stevens. "While our OSB prices averaged 7% below the third quarter of last year, we did see a steady rise in Random Lengths pricing, which began in August, and which has continued into this quarter. I’m also pleased to report that we began initial production of siding products from our Swan Valley, Manitoba mill last week, on time and on budget."

Net sales for the three-month period were down 10% year-over-year to $465 million.

Meanwhile, a net loss of $27 million was down from a loss of $20 million in the year-ago period. Reductions in OSB pricing accounted for an $18 million decrease in both operating results and adjusted EBITDA.

OSB performed worse than the company's Siding segment in terms of sales growth, decreasing 14% in sales versus a decrease of 3% for Siding. The Engineered Wood Products (EWP) segment was down 4% year-over-year, and the South American segment was down as much as 26%.

“With homebuilder confidence at a 10-year high and OSB prices continuing to increase, I am optimistic that LP’s results will continue to improve over the next several quarters,” Stevens concluded. “The longer term housing forecasts consistently show increased housing starts in each of the next three years as the industry begins to fill the gap created during the protracted downturn.”