Sign in

You're signed outSign in or to get full access.

LC

LOUISIANA-PACIFIC CORP (LPX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $0.663B and diluted EPS was $0.13, with Adjusted EBITDA of $82M and Adjusted Diluted EPS of $0.36; results reflected strength in Siding offset by an extended trough in OSB pricing .
  • Versus Wall Street consensus, Q3 revenue modestly beat and EPS modestly missed; across 2025 YTD, Q1 beat on EPS and revenue, Q2 beat on revenue but missed EPS, and Q3 delivered the slight revenue beat/EPS miss (S&P Global consensus)*.
  • Management reaffirmed full‑year Siding Adjusted EBITDA of ~$430M and raised Siding margin guidance to ~26%, while cutting full‑year CapEx to ~$315M and guiding Q4 OSB Adjusted EBITDA to ~$(45)M, implying consolidated Q4 Adjusted EBITDA of ~$32M .
  • Strategic update: LP is exploring converting the Maniwaki (Quebec) OSB mill to Siding for larger scale and capital efficiency; CEO Brad Southern announced plans to retire in February, with President Jason Ringblom positioned as successor—both viewed as continuity of strategy .

What Went Well and What Went Wrong

  • What Went Well

    • Siding revenue rose 5% YoY to $443M on pricing and favorable mix; ExpertFinish volume rose 17% with Naturals Collection driving price/mix benefits .
    • Siding OEE remained best‑in‑class, and company OCF conversion stayed strong: $82M EBITDA → $89M operating cash flow; liquidity exceeded $1.1B .
    • Management reaffirmed full‑year Siding Adjusted EBITDA (~$430M) and raised margin outlook to ~26%, underscoring pricing power and mix shift to higher value products .
    • Quote: “5% growth in Siding sales revenue, driven primarily by price and a strong mix, exceeded our expectations and guidance” — CEO Brad Southern .

  • What Went Wrong

    • OSB segment weakened materially: net sales down 29% to $179M and Adjusted EBITDA fell to $(27)M, driven by low prices and softer demand (particularly Southeast) .
    • Consolidated gross margin compressed (pricing/volume headwinds, inventory absorption, higher SG&A), and EPS declined YoY to $0.13; Q3 included $13M impairments .
    • Q4 outlook embeds continued OSB pressure (algorithmic guidance at ~$(45)M) and softer Siding growth (~3% YoY), with consolidated Adjusted EBITDA guided to only ~$32M .
    • CFO clarification: LPSA vs corporate unallocated reduces consolidated EBITDA by ~$10M for full‑year vs sum of Siding and OSB break‑even .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$0.724 $0.755 $0.663
Net Income ($USD Millions)$91 $54 $9
Diluted EPS ($USD)$1.30 $0.77 $0.13
Adjusted EBITDA ($USD Millions)$162 $142 $82
Adjusted Diluted EPS ($USD)$1.27 $0.99 $0.36
Gross Profit Margin %27.35%*23.58%*19.46%*
EBITDA Margin %21.82%*17.75%*10.26%*
EBIT Margin %16.99%*13.25%*4.98%*
Net Income Margin %12.57%*7.15%*1.36%*

Values marked with * retrieved from S&P Global.

Results vs Wall Street Consensus (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
Revenue: Actual ($USD)$724,000,000 $755,000,000 $663,000,000
Revenue: Consensus ($USD)$708,025,630*$736,414,760*$660,994,630*
EPS: Actual ($USD)$1.27 (Adj) $0.99 (Adj) $0.36 (Adj)
EPS: Consensus ($USD)$1.181*$1.035*$0.3806*

Values retrieved from S&P Global. Note: EPS comparisons use Adjusted Diluted EPS as the principal investor focus measure.

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentQ3 2024 Net Sales ($MM)Q3 2025 Net Sales ($MM)YoY %Q3 2024 Adj EBITDA ($MM)Q3 2025 Adj EBITDA ($MM)YoY %
Siding$420 $443 +5% $123 $117 -4%
OSB$253 $179 -29% $33 $(27) nm
LPSA$47 $39 -17% $9 $5 -50%
Other$2 $2 0% $(12) $(13) -
Total$722 $663 -8% $153 $82 -46%

KPIs (Q3 2025 vs Q3 2024)

KPIQ3 2024Q3 2025
Siding Solutions sales volume (MMSF)460 461
OSB—Structural Solutions volume (MMSF)402 379
OSB—Commodity volume (MMSF)431 376
OEE—Siding (%)77% 77%
OEE—OSB (%)78% 80%
OEE—LPSA (%)68% 72%
U.S. Housing Starts (000s): Single-Family260 249
U.S. Housing Starts (000s): Multi-Family93 116
U.S. Housing Starts (000s): Total353 364

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Siding Net SalesFY 2025~$1.7B (~9% growth) ~$1.68B (~8% growth) Lowered
Siding Adjusted EBITDAFY 2025~$430M (~25% margin) ~$430M (~26% margin) Margin Raised
OSB Adjusted EBITDAFY 2025~$(25)M ~$0M Raised
Consolidated Adjusted EBITDAFY 2025~$405M ~$420M Raised
Capital ExpendituresFY 2025~$350M ~$315M Lowered
Siding Net SalesQ4 2025n/a (previous was Q3 guide)~$370M (~3% YoY) New
Siding Adjusted EBITDAQ4 2025n/a~$82M (~22% margin) New
OSB Adjusted EBITDAQ4 2025n/a~$(45)M New
Consolidated Adjusted EBITDAQ4 2025n/a~$32M New
Dividend per ShareQ4 2025 declared$0.28 (Q2 paid Aug 29) $0.28 (Q4 payable Nov 21) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1, Q2 2025)Current Period (Q3 2025)Trend
Siding price/mix, ExpertFinishPrice up ~2% Q1; ExpertFinish +17% Q2; strong order file ExpertFinish +17% volume; Naturals driving 12% price in EF; managed order file until capacity adds Positive mix tailwind; demand sticky
OSB demand/pricingOSB EBITDA pressured by lower prices; commodity at multi‑year lows Q2 Prices barely above variable cost; demand sluggish esp. Southeast; Q4 OSB ~$(45)M Continued softness; management capacity discipline
Tariffs & trade (Section 232, Canada)Tariff expenses in Q2; Canadian EF tariffs impacting Canada EF retaliatory tariffs rescinded late Aug; Section 232 not impacting OSB/Siding imports from Canada Net positive tailwind; reduced cost burden
Capacity/CapEx & conversion optionsHoulton expansion urgency; CapEx ~$350–410M FY Exploring Maniwaki OSB-to-Siding conversion for scale/capex efficiency; CapEx cut to ~$315M More capital discipline; larger-scale option
Regional demandShed normalized in Q3; strong R&R Weakness in southern new construction; R&R stronger in northern markets; sheds slightly up YoY Mixed by region/segment
Management/talentIntegration of OSB + Siding organization announced in April CEO retirement announced; seamless succession to Ringblom; focus on share gains Continuity of strategy

Management Commentary

  • “The OSB business achieved 80% overall equipment effectiveness… while we are managing capacity with discipline to balance supply and demand” — CEO Brad Southern .
  • “We reaffirm our full‑year Siding EBITDA guidance of $430M… Q4 revenue ~3% YoY and EBITDA ~$82M, with outsized ExpertFinish contribution” — CFO Alan Haughie .
  • “We did announce a price increase… targeting net 3–4% in 2026” — President Jason Ringblom .
  • “Maniwaki… could translate to ~$400M of Siding at scale… presents network optimization opportunities” — President Jason Ringblom .
  • “Retaliatory tariffs to import ExpertFinish into Canada were rescinded in late August… currently bearing minimal tariff costs” — CFO Alan Haughie .

Q&A Highlights

  • Siding pricing outlook: LP announced typical annual price increase for 2026, net 3–4%, with tight channel inventory management ahead of the increase .
  • OSB utilization & stance: Utilization in high‑60% range to match committed volumes; refraining from selling “cash wood” to avoid price erosion .
  • Segment dynamics: Sheds normalized and up YoY; R&R second strongest; southern new construction weakest on affordability and confidence .
  • Capacity path & CapEx: Evaluating Maniwaki conversion vs Houlton/other options, prioritizing timing, capital efficiency, and network optimization; 2025 CapEx cut reflecting OSB deferrals and portfolio optimization in Siding .
  • ExpertFinish margins: Good and improving but still lag primed offering; incremental capacity of ~50–70M sq ft expected end Q1/early Q2 next year to relieve managed order file .

Estimates Context

  • Q3 2025: Revenue modestly beat consensus ($663.0M vs $661.0M); EPS modestly missed ($0.36 vs $0.381). Mix/pricing in Siding helped revenues, while OSB price trough and impairments/S&A weighed on EPS .
  • 2025 trajectory: Q1 beat both EPS and revenue; Q2 beat revenue and missed EPS; Q3 showed slight revenue beat/EPS miss—consensus likely to adjust on OSB trajectory and Siding margin resilience (S&P Global).
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Pricing/mix strength in Siding and ExpertFinish continues to underpin margins and share gains; full‑year Siding margin guide raised to ~26% despite macro softness .
  • OSB remains the principal drag; Q4 guide embeds $(45)M OSB EBITDA loss, implying cautious near‑term consolidated EBITDA ($32M) .
  • Capital discipline intensifies: FY CapEx cut to ~$315M; evaluating Maniwaki conversion to Siding for scale and capital efficiency—potential medium‑term capacity catalyst .
  • Tariff backdrop improved: Canadian retaliatory tariffs on EF rescinded; Section 232 currently not impacting OSB/Siding imports from Canada—reduces cost headwinds .
  • Liquidity robust (> $1.0B) enabling flexibility for strategic investments and returns; quarterly dividend maintained at $0.28 (next payable Nov 21, 2025) .
  • Near‑term trading: Expect sensitivity to OSB price prints and any signs of demand stabilization; Siding price increase for 2026 and EF capacity adds are supportive to sentiment .
  • Medium‑term thesis: Mix shift to higher‑value Siding/ExpertFinish, network optimization, and potential conversion project position LP for margin durability through cycles .