Q2 2024 Earnings Summary
Reported on Aug 7, 2024 (Before Market Open)
Pre-Earnings Price$93.97Last close (Aug 6, 2024)
Post-Earnings Price$94.75Open (Aug 7, 2024)
Price Change
$0.78(+0.83%)
- LPX is experiencing strong growth in its Siding business, driven by both volume and price increases, with expectations for continued growth based on strength in both new residential construction and the Repair and Remodel segment. Management attributes much of this growth to successful initiatives with big builders and expects continued success into next year.
- The company is actively investing in sales and marketing to drive further growth and gain market share, particularly in the Siding segment. They have seen meaningful growth in the retail channel, with the expansion of their partnership with Home Depot contributing significantly to growth in Q2 and expected to continue in Q3.
- LPX is achieving operational efficiencies through improvements in Operational Equipment Effectiveness (OEE), providing leverage to generate more output without adding shifts. Management sees ongoing opportunities for OEE improvement, which could enhance margins and profitability in the future.
- Decrease in Raw Material Tailwind Expected: The company indicated that the raw material tailwind experienced in Q2 may not be as positive for the remainder of the year, potentially leading to increased costs and pressure on margins.
- Significant Decline in Siding EBITDA Anticipated in Q4: The company expects Siding EBITDA to drop from approximately $100 million at the midpoint in Q3 to around $70 million in Q4. This steep decline is due to inefficiencies in ramping up new products, essential maintenance, and a month-long shutdown at one of their mills.
- Lower OSB Operating Rates Forecasted: The OSB operating rate was about 86% in Q2 and is expected to be slightly lower in Q3. This decrease may indicate weakening demand or overcapacity in the OSB segment, which could negatively affect earnings.
Research analysts covering LOUISIANA-PACIFIC.