Louisiana-Pacific Gears Up for Q3 Earnings: Things to Keep in Mind

Louisiana-Pacific Corporation LPX is scheduled to report third-quarter 2024 results on Nov. 5, before market open.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, the company’s earnings and net sales beat the Zacks Consensus Estimate by 12.4% and 1.5%, respectively. Its earnings increased by a whopping 280% and net sales grew 33% from the year-ago period owing to solid Siding and OSB sales.The company’s earnings surpassed the consensus mark in each of the trailing four quarters, with an average of 25.2%.Trend in EstimatesThe Zacks Consensus Estimate for Louisiana-Pacific’s third-quarter earnings per share (EPS) is pegged at 88 cents, which increased by a cent in the past 30 days. This suggests a decline of 45.7% from $1.62 reported a year ago.Louisiana-Pacific Corporation Price and EPS Surprise Louisiana-Pacific Corporation price-eps-surprise | Louisiana-Pacific Corporation QuoteThe consensus estimate for net sales is pegged at $699.7 million, indicating a decline of 3.9% from $728 million in the year-ago quarter.Factors to NoteLouisiana-Pacific’s third-quarter earnings and sales are likely to have declined on a year-over-year basis. Low consumer confidence and high interest rates is likely to have negatively impacted the wood industry. Also, economic uncertainty and ongoing weakness in home sales and building material sales are limiting residential remodeling.Nonetheless, increased penetration of Siding products in R&R and roll out SmartSide products have been aiding the company. LPX expects Siding Solutions’ revenues to grow 16-18% from the year-ago period. The Siding unit has been witnessing solid demand despite persistent macroeconomic impacts and slowness in the housing industry. Siding is less sensitive to housing market cyclicality as more than 50% of Siding Solutions demand comes from other markets like sheds and repair and remodeling.The consensus estimate for the Siding segment’s net sales is pegged at $402 million, indicating an improvement from the year-ago reported figure of $345 million. The same for OSB units is pegged at $232 million, implying a significant decline from $335 million in the prior year. The consensus mark for the South America segment’s net sales is pegged at $50 million, indicating growth from $45 million in the prior year.Louisiana-Pacific’s efforts to gradually transform from a commodity producer to a more stable cash-generative business by increasing revenues and EBITDA mix are encouraging. It has been mainly focusing on three areas — increasing the efficiency of mills by improving productivity, run time and quality through overall equipment effectiveness or OEE initiatives; applying best practices to its supply chain; and optimizing infrastructure costs.Coming to the bottom line, LPX anticipates a consolidated adjusted EBITDA of $105-$125 million, up from $71 million reported a year ago. Of this, $95-$105 million is likely to be contributed by Siding and $10-$20 million is anticipated to be added by OSB. Siding is likely to generate margins of 25% in the third quarter compared with 21% reported a year ago.The consensus mark for adjusted EBITDA for the Siding segment is pegged at $97 million, and that for OSB is pegged at $18 million. In the prior-year period, adjusted EBITDA for the OSB was $120 million.What the Zacks Model SaysOur proven model predicts an earnings beat for Louisiana-Pacific this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.LPX currently has an Earnings ESP of +2.29% and carries a Zacks Rank #3.Other Stocks With Favorable CombinationHere are some other companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.Johnson Controls International plc JBI has an Earnings ESP of +1.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.JBI’s earnings for the to-be-reported quarter are expected to increase 19.1%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 2%.Toll Brothers, Inc. TOL currently has an Earnings ESP of +2.35% and a Zacks Rank of 2.TOL’s earnings for the to-be-reported quarter are expected to increase 4.9%. The company reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%.VSE Corporation VSEC has an Earnings ESP of +1.46% and carries a Zacks Rank #3.VSEC’s earnings topped the consensus mark in the last two quarters. Earnings for the to-be-reported quarter are expected to decline 31.5% year over year.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Louisiana-Pacific Corporation (LPX): Free Stock Analysis Report Toll Brothers Inc. (TOL): Free Stock Analysis Report VSE Corporation (VSEC): Free Stock Analysis Report Janus International Group, Inc. (JBI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks