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LC

LOUISIANA-PACIFIC CORP (LPX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 consolidated net sales were $681M, up 3% year over year; diluted EPS was $0.89; Adjusted EBITDA was $125M, down 4% YoY as lower OSB pricing offset Siding strength .
  • Siding net sales rose 9% to $362M on 6% higher prices and 3% higher volumes; OSB net sales fell 2% to $267M on 7% lower prices despite 6% higher volumes .
  • Versus prior guidance, LP delivered a clear beat: Q4 consolidated Adjusted EBITDA came in at $125M vs prior guide of $85–$105M; OSB segment EBITDA was $50M vs prior guide of $15–$25M; Siding EBITDA was within the $70–$80M guide at $72M .
  • 2025 outlook: Q1 Siding revenue $390–$400M and ~25% EBITDA margin; FY Siding revenue $1.65–$1.7B and ~$415–$425M EBITDA; consolidated FY Adjusted EBITDA $615–$635M; CapEx ~$410M; quarterly dividend raised to $0.28 (+8%) .

What Went Well and What Went Wrong

What Went Well

  • Siding growth and mix drove margin resiliency: “Siding sales grew by 9%… higher selling prices added another 6 points of revenue growth… we largely reinvested these earnings in selling and marketing and in meal staffing” .
  • Strong execution and cost control in OSB despite pricing: “By effectively managing what we can control, the business recovered most of the revenue impact and half of the EBITDA impact… through higher volumes, improved OEE, and efficient raw material utilization” .
  • Q4 beat vs guidance and confidence in 2025: “EBITDA should land between $95–$105M [Siding Q1’25]… consolidated Adjusted EBITDA $130–$150M in Q1 and $615–$635M for FY 2025” .

What Went Wrong

  • OSB pricing headwind reduced Q4 EBITDA: “Lower prices in the fourth quarter cost the segment about $18 million in both revenue and EBITDA” .
  • Higher tax provision impacted YoY EPS despite operational strength: “Increase in Adjusted EBITDA of $5 million (or 4%) and a $15 million increase in tax provision” contributed to only modest net income growth .
  • Maintenance timing and inflationary pressures: Q4 included downtime and absorption impacts (Houlton project), and 2025 planning assumes ~$20M inflation (labor and raw materials) that weighs ~1.5–2 pts on Siding margin .

Financial Results

Consolidated Results vs Prior Periods

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$658 $814 $722 $681
Diluted EPS ($USD)$0.81 $2.23 $1.28 $0.89
Net Income ($USD Millions)$59 $160 $90 $63
Adjusted EBITDA ($USD Millions)$129 $229 $153 $125

Segment Breakdown

Segment MetricQ4 2023Q2 2024Q3 2024Q4 2024
Siding Net Sales ($MM)$332 $415 $420 $362
Siding Adjusted EBITDA ($MM)$72 $105 $123 $72
OSB Net Sales ($MM)$272 $351 $253 $267
OSB Adjusted EBITDA ($MM)$59 $125 $33 $50
LPSA Net Sales ($MM)$52 $46 $47 $50
LPSA Adjusted EBITDA ($MM)$11 $10 $9 $13

KPIs (Volumes)

KPI (MMSF, 3/8” basis)Q4 2023Q2 2024Q3 2024Q4 2024
Siding Solutions (MMSF)389 459 460 401
OSB – Structural Solutions (MMSF)408 452 402 408
OSB – Commodity (MMSF)375 415 431 419

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Siding Net Sales YoY growthQ1 2025N/A$390–$400M (+9–11%) New
Siding Adjusted EBITDAQ1 2025N/A$95–$105M (~25% margin) New
OSB Adjusted EBITDAQ1 2025N/A$35–$45M New
Consolidated Adjusted EBITDAQ1 2025N/A$130–$150M New
Siding Net SalesFY 2025N/A$1.65–$1.7B (+7–9%) New
Siding Adjusted EBITDAFY 2025N/A$415–$425M (~25% margin) New
OSB Adjusted EBITDAFY 2025N/A$200–$210M New
Consolidated Adjusted EBITDAFY 2025N/A$615–$635M New
Capital ExpendituresFY 2025N/A~$410M; ~$200M growth, ~$210M sustaining New
Quarterly Dividend per ShareQ1 2025$0.26 $0.28 Raised
Consolidated Adjusted EBITDAQ4 2024$85–$105M Actual: $125M Raised vs prior guide (beat)
OSB Adjusted EBITDAQ4 2024$15–$25M Actual: $50M Raised vs prior guide (beat)
Siding Adjusted EBITDAQ4 2024$70–$80M Actual: $72M Maintained (in-line)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 / Q3 2024)Current Period (Q4 2024)Trend
Siding pricing/mixQ2: Price +6%, volume +22%; records in Siding . Q3: Price +6%, mix favorable via ExpertFinish; record Siding EBITDA .Q4: Price +6%, volume +3%; reinvestments in sales/marketing; target ~25% margin sustained .Stable price realization; continued mix gains via ExpertFinish.
Capacity expansionQ3: Planning next Siding project; 2025–26 CapEx to rise; network options (Wawa, Canadian mills, press lines) .Q4: Houlton Line 2 adding ~300M feet; parallel projects; pre-buys initiated; automation opportunities .Acceleration; execution readiness increasing.
Tariffs/macroQ3: Hypothetical import tariffs; monitor MDI exposure; macro affordability dynamics .Q4: Insufficient clarity to incorporate tariffs; plan to manage supply chain; OSB price is market-driven .Risk monitored; not in guidance.
Supply chain/maintenanceQ3: East Coast port strike delayed Houlton project into Q4 .Q4: Q4 maintenance cadence and absorption impacts; heavier Q4 maintenance; OSB efficiency projects .Normalizing; proactive investments for safety/efficiency.
Structural Solutions (OSB)Q3: Focus to grow share; commodity vs structural mix fluctuates .Q4: Shift production where margin-accretive; constraints rare; plan to grow in 2025 .Continued strategic emphasis.
Channel/inventoryQ3: Channel inventories normal; manage Dec ahead of Jan price increase .Q4: Better visibility; seasonal build normal; manage with distribution cooperation .Improved visibility; disciplined channel mgmt.

Management Commentary

  • “Q4 was a strong finish to a record year for Siding that featured growth, share gains and margin expansion… For LP as a whole… $681 million in sales, $125 million in EBITDA and $105 million in operating cash flow” – CEO Brad Southern .
  • “For Siding… we expect sales growth in the first quarter between 9% and 11%… EBITDA… $95M–$105M for an EBITDA margin of about 25%. For the full year… revenue… $1.65B–$1.7B… EBITDA $415M–$425M” – CFO Alan Haughie .
  • “We are increasing our investments in new product innovation, demand creation and capacity expansion… 2025 and 2026 will see significantly increased investments in capacity expansion” – CEO Brad Southern .
  • “LP ended 2024 with $340 million in cash, 0 net debt and almost $900 million in total liquidity” – CFO Alan Haughie .

Q&A Highlights

  • Lennar pull-through executing at full scale, at expectations or slightly above; key learning is contractor training and local distribution to ensure execution post-procurement .
  • Structural Solutions emphasis: incremental margin capture vs commodity OSB; investments are relatively small/quick; plan to grow in 2025 .
  • Siding margin bridge 2025: ~65% blended flow-through on volume/price; $20M inflation ($8M labor, rest raw materials), $10–$15M selling/marketing, ~$5M engineering/staffing for expansions; ~1.5–2 pts margin impact; no aggressive mix benefit assumed .
  • Capacity expansion specifics: Houlton Line 2 ~300M feet focused on lap & trim; parallel second project decision pending; pre-buys started to secure long-lead equipment; inflation elevated vs pre-COVID but returns supported by pricing power .
  • Maintenance cadence: Q4 heaviest; 2025 includes OSB green-end modernization for efficiency and safety; shed mix is lower price but not lower margin .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, EBITDA was unavailable due to API limit at time of retrieval; comparisons to S&P Global consensus cannot be provided at this time. Values retrieved from S&P Global were unavailable.
  • Versus company guidance (from Q3): LP delivered a significant beat on consolidated and OSB EBITDA for Q4 as noted above, implying upward pressure on forward estimates for OSB EBITDA and consolidated EBITDA; Siding was in-line .

Key Takeaways for Investors

  • Siding remains the core growth engine with price/mix and share gains; management is guiding to ~25% EBITDA margin in Q1 and FY 2025 even in a flat housing start backdrop, underpinned by demand creation and product innovation .
  • The Q4 beat vs prior guide, particularly OSB EBITDA, underscores operational agility; however, OSB remains price-sensitive, and EBITDA can swing with commodity dynamics .
  • Capacity expansions (Houlton Line 2 and a second parallel project) are strategic to avoid future allocation and support high-single digit volume CAGR; expect elevated CapEx ($~410M FY 2025) and near-term margin headwinds from reinvestment, offset by longer-term scale and efficiency gains .
  • Channel/inventory discipline and local market execution are differentiators; seasonal inventory builds are normal, and management is managing price increases and order files to optimize Q1 .
  • Tariff risk is monitored but not embedded in guidance; raw material inflation assumptions are conservative and partially offset by expected reductions in certain inputs (e.g., MDI) .
  • Balance sheet strength (cash $340M, ~$900M liquidity, 0 net debt) enables both growth and shareholder returns; dividend increased to $0.28 (+8%), with buybacks continuing post year-end .
  • Near-term trading: Positive reaction bias on execution (Q4 beat, confident 2025 Siding guide), but watch OSB price prints and tariff headlines; medium-term thesis anchored on Siding capacity expansion, ExpertFinish adoption, and builder conversions (e.g., Lennar) .

Non-GAAP Notes

  • Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are non-GAAP measures; reconciliations and definitions are provided in the press release/8-K; Siding margin targets reference Adjusted EBITDA .