Louisiana-Pacific Corporation (LPX) reported a loss of $33 million or 25 cents per share from continuing operations in the second quarter of 2011 compared with an income of $24 million or 17 cents per share in the year-ago quarter. The loss was much wider than the Zacks Consensus Estimate of a loss of 16 cents per share.
Net sales declined 19% year over year to $362.4 million, driven by a weak housing environment, poor demand for houses, rising inventories, high unemployment and lower consumer confidence. Each of the major segments of the company witnessed deterioration in terms of sales volume.
Operating loss in the reported quarter was $24 million versus an income of $49 million in the prior-year quarter.
The Oriented Strand Board segment reported net sales of $140.6 million during the quarter, down 35.4% from $217.8 million a year ago. The year-over-year decline in sales was primarily attributable to a 36% drop in sales price along with a 4% decrease in sales volume. The segment operating loss was $23 million compared with an income of $48 million in the prior-year quarter.
The Siding segment generated net sales of $118.6 million, down 9.2% from $130.6 million in the prior-year quarter. Lower retail sales as well as housing starts negatively impacted the segment’s operations, thereby affecting sales and income. Operating income in the segment was $11 million compared with $22 million a year ago.
Net sales in the Engineered Wood Products segment declined 4.1% to $53.6 million from $55.9 million a year ago. Operating loss narrowed to $3 million from $4 million in the second quarter of 2010, driven by higher prices, partly offset by higher raw material costs.
Louisiana-Pacific had cash and cash equivalents of $334.0 million as of June 30, 2011 compared with $389.3 million as of December 31, 2010. Long-term debt stood at $716.8 million at the end of the second quarter of 2011 versus $714.5 million at the end of the fourth quarter of 2010. Inventories piled up to $173.9 million as of June 30, 2011 against $151.9 million as of December 31, 2010.
In the first six months of the year, the company used $39.0 million of cash in operating activities compared with $35.6 million of cash generated from operating activities in the corresponding period of 2010.
Nashville, Tennessee-based Louisiana-Pacific, which holds a Zacks #4 Rank (Sell rating) stock, manufactures and distributes building products for new home construction, repair and remodeling, manufactured housing, and light industrial and commercial construction.
The company offers its products to retail home centers, manufactured housing producers, distributors, wholesalers and building materials dealers in North America, South America, Asia and Europe. Louisiana-Pacific’s key competitors include Universal Forest Products Inc. (UFPI) and Weyerhaeuser Co. (WY).
