Louisiana-Pacific Q2 Earnings Call Highlights

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.

Louisiana-Pacific 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.

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.

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. 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. 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.” Durin...