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LC

LOUISIANA-PACIFIC CORP (LPX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a revenue beat but an EPS miss: Net sales were $755M vs S&P Global consensus $736.4M*, while Adjusted Diluted EPS was $0.99 vs $1.04 consensus*; GAAP diluted EPS was $0.77 .
  • Siding set records for sales volume, revenue, and EBITDA; OSB was pressured by multiyear-low commodity prices, reducing consolidated Adjusted EBITDA to $142M (down $86M YoY) .
  • Guidance shifted materially: full-year consolidated Adjusted EBITDA was cut to ~$405M (from $535–$555M prior), OSB full-year Adjusted EBITDA to ~$(25)M (from $110–$120M), while full-year Siding EBITDA was reaffirmed at ~$430M; CapEx reduced to ~$350M (from ~$410M) .
  • Stock reaction: pre-market fell ~4.17% on the release, reflecting EPS miss and OSB headwinds .

What Went Well and What Went Wrong

What Went Well

  • Siding momentum: “LP’s Siding segment grew and captured share to set new records for sales volume, sales revenue, and EBITDA in the second quarter” — Brad Southern, CEO .
  • Mix and pricing support: Siding net sales rose 11% to $460M on +8% volumes and +2% price; ExpertFinish net sales grew 17% YoY in Q2 .
  • Operational execution: Siding OEE improved to 78% (+1ppt YoY), supporting throughput and margins; segment Adjusted EBITDA reached $125M .

What Went Wrong

  • OSB pricing downdraft: OSB net sales fell $101M YoY to $250M; OSB Adjusted EBITDA dropped to $19M (down $106M YoY), driven by lower prices .
  • Non-GAAP to GAAP bridge items: Q2 included $17M asset impairments and $3M reorganization costs, weighing on GAAP EPS ($0.77) despite Adjusted EPS of $0.99 .
  • Tariff and inventory impacts: Q2 Adjusted EBITDA decline included a $6M inventory valuation charge and ~$3M tariff expenses related to sales into Canada .

Financial Results

Summary vs. Prior Periods and Estimates

MetricQ4 2024 (oldest)Q1 2025Q2 2025 (newest)Q2 2025 Consensus
Net Sales ($USD Millions)$681 $724 $755 $736.4*
GAAP Diluted EPS ($)$0.89 $1.30 $0.77 $1.04*
Adjusted Diluted EPS ($)$1.03 $1.27 $0.99 —
Adjusted EBITDA ($USD Millions)$125 $162 $142 —
Siding Adjusted EBITDA ($USD Millions)$72 $106 $125 —
OSB Adjusted EBITDA ($USD Millions)$50 $54 $19 —

Values with asterisks were retrieved from S&P Global.

Interpretation:

  • Revenue beat: $755M vs $736.4M*, driven by Siding growth.
  • EPS miss: Adjusted EPS $0.99 vs $1.04*, primarily on OSB price pressure and impairment/reorg charges .

Segment Breakdown (Q2 2025 vs. Q2 2024)

SegmentNet Sales Q2 2024 ($MM)Net Sales Q2 2025 ($MM)Adjusted EBITDA Q2 2024 ($MM)Adjusted EBITDA Q2 2025 ($MM)
Siding$415 $460 $105 $125
OSB$351 $250 $125 $19
LPSA$46 $43 $10 $9
Other$2 $2 $(11) $(10)
Total$814 $755 $229 $142

KPIs

KPIQ2 2024Q2 2025
Siding Solutions Sales Volume (MMSF)459 498
OSB Structural Solutions Sales Volume (MMSF)452 450
OSB Commodity Sales Volume (MMSF)415 430
Siding OEE (%)77% 78%
OSB OEE (%)78% 79%
LPSA OEE (%)76% 70%
U.S. Housing Starts (k units)370 total; SF 281; MF 89 367 total; SF 257; MF 109

Guidance Changes

MetricPeriodPrevious Guidance (May 6, 2025)Current Guidance (Aug 6, 2025)Change
Siding Net SalesQ2 2025 vs PY$445–$455M (9–10% growth) —N/A (period passed)
Siding Adjusted EBITDAQ2 2025$110–$120M (~26% margin) —N/A
OSB Adjusted EBITDAQ2 2025$15–$25M —N/A
Consolidated Adjusted EBITDAQ2 2025$125–$145M —N/A
Siding Net SalesQ3 2025 vs PY—~$430M (~3% growth) New quarterly guide introduced
Siding Adjusted EBITDAQ3 2025—~$110M (~26% margin) New
OSB Adjusted EBITDAQ3 2025—~$(45)M (assumes flat Random Lengths) New; negative
Consolidated Adjusted EBITDAQ3 2025—~$65M New
Siding Net SalesFY 2025~$1.7B (>9% growth) ~$1.7B (~9% growth) Maintained
Siding Adjusted EBITDAFY 2025$425–$435M (~25% margin) ~$430M (~25% margin) Maintained (midpoint)
OSB Adjusted EBITDAFY 2025$110–$120M ~$(25)M Lowered materially
Consolidated Adjusted EBITDAFY 2025$535–$555M ~$405M Lowered materially
Capital ExpendituresFY 2025~$410M (Growth $200M; Sustaining $210M) ~$350M (Growth $180M; Sustaining $170M) Lowered $60M
DividendQ3 2025$0.28/share declared $0.28/share payable Aug 29, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macroPreparing for flat housing; cautious R&R; discuss tariff uncertainty and cost dynamics Tariff headwinds quantified (~$2M Q1; ~$12M FY in Siding); flexibility in supply chain Tariff expenses ~$3M in Q2; guidance assumes OSB prices flat; demand weakening somewhat in OSB Deteriorating OSB backdrop; Siding resilient
Product performance (ExpertFinish/Naturals)Innovation pipeline; capacity utilization gains; plan to expand prefinishing Naturals collection launched; record ExpertFinish revenue/volume; margin still ramping ExpertFinish +17% YoY Q2 revenue; continued portfolio emphasis Positive momentum
Supply chain/operations (OEE, capex)OEE improved; capacity expansions planned (Houlton line 2, prefinish growth) Liquidity $1B; revolver expanded; capex programs staged CapEx cut to ~$350M; Siding OEE up; OSB OEE up; focus on efficiency Capex prudence; operational gains
Regional/segment trends (shed/R&R/builders)Strong Siding across geographies; Lennar program on track Shed recovery; R&R strength via ExpertFinish; builder series share gains Shed still favorable; Q3 order file stabilized below strong Q2 start; Southern markets pressured Mixed near term
Regulatory/legal (Section 232)Monitoring tariffs; no precise impacts guided Section 232 not expected to impact LP’s OSB or Siding No new direct impacts; modeling prudently for OSB Stable

Management Commentary

  • “LP’s Siding segment grew and captured share to set new records for sales volume, sales revenue, and EBITDA in the second quarter.” — Brad Southern, CEO .
  • “The demand environment is weakening somewhat, most acutely in OSB… full-year total CapEx ~$350M (growth ~$180M; sustaining ~$170M).” — Alan Haughie, CFO (Q2 call) .
  • “We enjoy the added flexibility of $1 billion in liquidity… we remain focused on safety, efficiency, product innovation, share gains, growth, leverage and margin expansion.” — Brad Southern (Q1 call) .

Q&A Highlights

  • Order file cadence: Q2 order file started strong but weakened through the quarter and stabilized consistent with Q3 guidance; management cautioned Q2 may be the peak quarter for 2025 .
  • OSB dynamics: Pricing at multi-year lows; shift toward commodity given builder affordability focus; structural solutions growth remains strategic but faces headwinds near term .
  • Capex and timing: Parallel Siding expansions (Houlton line 2 then another site); some long-lead buys already initiated; returns still attractive despite higher post-COVID project costs .
  • ExpertFinish margins: Pricing solid; margins still below the segment average but expected to improve as the business scales .
  • Section 232 tariffs: No expected direct impact on LP’s Canada-produced OSB/Siding imported into the U.S. per management .

Estimates Context

  • Q2 2025: Revenue beat ($755M vs $736.4M*) and EPS miss (Adjusted EPS $0.99 vs $1.04*). EPS estimate count: 10; Revenue estimate count: 9*.
  • Q1 2025: Both revenue ($724M vs $708.0M*) and EPS ($1.27 vs $1.18*) exceeded consensus*.
  • FY 2025 consensus: EBITDA ~$429.1M*, Revenue ~$2.73B*, Target price ~$101.9*; FY 2026 consensus: EBITDA ~$528.1M*, Revenue ~$2.91B*.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup: Expect continued resilience from Siding (volume/price/mix) vs. OSB headwinds; negative OSB EBITDA guidance underscores risk to consolidated earnings in H2 .
  • Guidance reset: Material cut to consolidated and OSB full-year EBITDA, offset by maintained Siding targets and reduced CapEx — a defensive tilt to preserve returns and flexibility .
  • Margin trajectory: Siding margin durability supported by OEE gains and demand creation; ExpertFinish margin ramp should be a medium-term lever .
  • Volume drivers: Shed and R&R (ExpertFinish) continue to offset softer new-build in certain geographies; builder series share gains remain a potential catalyst .
  • Liquidity and capital allocation: ~$1.1B liquidity and dividend continuity ($0.28/share) provide support; watch for pace/timing of Siding expansions (Houlton line 2; subsequent site) .
  • Trading implications: Q3 guide implies sequential deceleration; consider positioning for volatility tied to commodity OSB price prints and tariff headlines while leaning into Siding strength .
  • Medium-term thesis: Structural growth in Siding via product innovation (Naturals, ExpertFinish), brand-building in R&R, and capacity expansions should re-accelerate EBITDA once OSB stabilizes and new capacity comes online .