Louisiana-Pacific Corporation’s (LPX) has been recently upgraded by Moody’s Investors Service, the credit rating agency of Moody’s Corporation (MCO). The rating for the company has been raised to “stable” from “negative”, reflecting the agency’s growing confidence in the building material maker’s future performance based on its improved earnings, liquidity and credit profile.
Based in Nashville, Tennessee, Louisiana-Pacific is engaged in manufacturing and distribution of oriented strand board, engineered wood products, siding, decking, molding, and wall coverings at facilities throughout the United States and Canada. Most of its products are used in new-home construction, repair and remodeling and manufacturing of houses. Louisiana is the second largest producer of engineered wood products in the region.
During 2010, Louisiana-Pacific posted a loss of $32 million or 25 cents per share, which was much lower than the loss of $117 million or $1.06 per share in the previous year. Revenues were $1.4 billion, up 28% from $1.1 billion in 2009. The company’s cash balance as of December 31, 2010 was $389.3 million.
Louisiana-Pacific’s successful implementation of efficient cost-cutting measures improved the company’s financial performance last year. Alongside, a gradually improving U.S. economy has also kept the prices of its products at a higher level, thereby adding to its marked progress.
Moody’s also lifted the company’s liquidity rating to “SGL-2” from “SGL-3.” This upgrade was a result of Louisiana-Pacific’s improving cash position, limited dependence on third-party for liquidity and modest cash burn. Based on the same reasons and leading market share, Moody’s gave a corporate family rating of “Ba3” to the company.
LOUISIANA PAC (LPX): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
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