Louisiana-Pacific Q2 Earnings Call Highlights

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Sat, August 8, 2026 at 8:03 PM GMT+3 7 min read

LPX +3.43%

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Second-quarter results weakened: Sales fell $90 million year over year to $664 million and EBITDA dropped $63 million to $79 million, primarily because of lower OSB prices and volumes. LP expects OSB EBITDA of approximately negative $45 million in Q3 and negative $120 million for 2026 if prices remain flat.
Siding showed resilience and is expected to rebound: Despite a 4% sales decline and weather, freight and inflation disruptions, the segment maintained a 26% EBITDA margin. LP forecasts Q3 Siding revenue of $460 million–$470 million and EBITDA of $110 million–$120 million, with modest volume growth anticipated.
LP is prioritizing Siding investment while reducing spending elsewhere: The company cut its 2026 capital-expenditure outlook by $70 million to about $320 million, largely by delaying OSB maintenance projects, while directing roughly three-quarters of spending toward Siding capacity expansions.

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Louisiana-Pacific (NYSE:LPX) reported lower second-quarter sales and EBITDA as weak oriented strand board, or OSB, pricing weighed on results, while its Siding segment remained profitable and the company said it expects that business to return to year-over-year growth in the third quarter.

Net sales for the second quarter were $664 million, down $90 million from the prior-year period, while EBITDA declined $63 million to $79 million. Adjusted earnings per share were $0.40. The company generated $140 million in operating cash flow, returned $21 million to shareholders through dividends, and ended the quarter with $228 million in cash and nearly $1 billion of total liquidity, including an undrawn $750 million revolver.

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Chief Executive Officer Jason Ringblom said LP continued to focus on safety and operational efficiency amid a housing market that "feels like it's stuck in neutral." He said lower OSB prices, reflecting soft demand in North and South America, accounted for most of the company's overall revenue and EBITDA decline.

Siding Performance and Third-Quarter Outlook

LP's Siding sales declined 4% year over year in the second quarter. A 7% increase in prices partly offset an 11% decrease in volumes, compared with what the company described as its all-time record quarterly volume performance a year earlier. The segment produced a 26% EBITDA margin, in line with company guidance.

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Within the segment, primed Siding volume fell 12%, while ExpertFinish volume rose 1%. Chief Financial Officer Alan Haughie said higher prices contributed $27 million to Siding revenue and EBITDA, while lower volumes reduced revenue by $46 million and EBITDA by $24 million.

LP said its Prime SmartSide channel inventories have normalized after an unintended pull-forward of sales, particularly in the shed sector, during the fourth quarter of 2025. Ringblom said distributor sell-through for Prime SmartSide in the second quarter was higher than in any of the prior five quarters, while order intake exceeded four of the previous five quarters.

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The company expects Siding revenue of $460 million to $470 million in the third quarter, a range whose low end would equal the prior revenue record. LP expects third-quarter Siding EBITDA of $110 million to $120 million, representing an EBITDA margin of about 25%, and reaffirmed its prior full-year guidance for Siding revenue, EBITDA and margin.

"Higher selling prices are projected to contribute the majority of this growth," said Aaron Howald, LP's vice president of investor relations, financial planning and analysis, and business development. "But based on the momentum of our order file as well as our demand outlook, we also expect modest volume increases."

During the question-and-answer session, Ringblom said shed-sector volume increased more than 30% sequentially from the first to the second quarter, though LP still expects the segment to be down 10% to 15% for the full year. The company expects repair-and-remodeling demand to be flat to slightly higher, while other markets are expected to be flat to slightly down in line with underlying housing conditions.

Weather, Freight and Inflation Pressured Margins

LP said Siding margins faced unexpected late-quarter disruptions, including equipment failures at its Dawson Creek, British Columbia, mill and severe flooding in western Manitoba that affected employees at its Swan Valley operation and transportation infrastructure.

Haughie said the events caused lost production, higher freight costs and unplanned inventory movements. Flood damage required the company to shift some shipments from rail to truck and use longer routes to market. Constrained freight capacity added to transportation cost pressure beyond the effect of higher crude oil prices.

The company also cited $14 million of inflationary costs and other items in Siding, with more than half attributable to higher crude oil prices flowing through its raw-material supply chain. Haughie said the disruptions pulled forward some inventory-related effects that had been expected in the third quarter, and that, absent those events, Siding EBITDA would have been at or above the top end of guidance.

Howald said LP does not intend to pursue a midyear Siding price increase, instead indicating that any raw-material cost offset would likely be incorporated into its full-year price action for 2027. He said the company believes stable pricing may be supporting volume performance, although LP cannot precisely quantify the effect.

OSB Conditions Deteriorate

OSB results declined as pricing and volumes both weakened. Haughie said OSB prices ended the quarter approximately $15 below the company's guidance algorithm. Lower prices and volumes reduced OSB revenue by $67 million and EBITDA by $46 million from the prior-year quarter.

LP expects OSB EBITDA of approximately negative $45 million in the third quarter and negative $120 million for the full year, assuming prices remain flat at current levels through year-end. Howald said OSB prices had fallen about $12, or 6%, since LP's May earnings call despite higher raw-material costs.

Ringblom said LP operated its OSB network at a utilization rate in the mid-to-high 70% range during the second quarter and plans to maintain that range in the third quarter to balance supply with customer demand. The company is pursuing cost and efficiency improvements while seeking to protect its assets and maintain safety standards.

LP also said Structural Solutions volumes have been pressured by cost-conscious builders trading down to lower-value products and by building-code changes affecting its radiant barrier products. However, management said it has manufacturing redundancy across its network and does not expect potential production adjustments to materially impair Structural Solutions supply.

Capital Spending Reduced, Siding Expansion Continues

LP lowered its 2026 capital-expenditure outlook by $70 million to approximately $320 million. Howald said the reduction primarily reflects delayed lower-risk maintenance and sustaining projects, predominantly within OSB, rather than a retreat from growth investments.

About three-quarters of planned capital spending is expected to go to Siding, including essentially all growth capital. LP is ramping a new ExpertFinish line in Green Bay, plans to add 20 million feet of capacity at its Bath, New York, facility later this year, and broke ground in June on an ExpertFinish painting facility in North Branch, Minnesota.

Management said the North Branch project will be LP's largest and most efficient ExpertFinish painting facility. The company said it has 400 million to 500 million feet of headroom in primed Siding capacity, with additional ExpertFinish capacity coming from its expansion projects.

LP continues to assess future Siding capacity options, with its Maniwaki facility identified as the leading candidate for a potential next project. Howald said a new project could take roughly two and a half years from an investment decision to the production of its first board, depending on the location and project scope.

The company also announced that Haughie will retire as CFO on Sept. 1 after nearly seven years in the role. Howald is set to succeed him.

About Louisiana-Pacific (NYSE:LPX)

Louisiana-Pacific Corporation (NYSE: LPX) is a leading manufacturer of building materials and engineered wood products for residential, industrial and light commercial construction. The company produces a diverse portfolio of products, including oriented strand board (OSB), engineered wood siding, trim, molding, sheathing panels and subflooring. Its flagship product lines, such as LP® SmartSide® trim and siding, are designed to offer enhanced durability, moisture resistance and ease of installation, helping builders and homeowners achieve long-lasting performance in a variety of climates.

Founded in 1973 as a spin-off from Georgia-Pacific, Louisiana-Pacific established its reputation by pioneering innovative manufacturing techniques for OSB, becoming one of the first companies to bring the product to market in the 1980s.

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