Louisiana-Pacific 2025 Q1 Earnings Net Income Declines 15.7%

Louisiana-Pacific (LPX) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company’s earnings came in below expectations, with a 15.7% drop in net income compared to the previous year. The guidance for the upcoming quarters suggests steady growth in the Siding segment, indicating a positive outlook. Louisiana-Pacific is focused on navigating market challenges while maintaining strategic growth.

Revenue

The total revenue for Louisiana-Pacific in 2025 Q1 held steady at $724 million compared to the same quarter last year. The Siding segment contributed $402 million, showcasing its prominence, while the OSB segment added $267 million. LPSA accounted for $52 million in revenue, and the Other segment brought in $2 million, culminating in total sales of $724 million.

Earnings/Net Income

Louisiana-Pacific's EPS fell by 12.8% to $1.30 in 2025 Q1 from $1.49 in 2024 Q1, while net income dropped to $91 million from $108 million in the previous year. This reflects a challenging quarter for earnings performance.

Post-Earnings Price Action Review

The strategy of purchasing Louisiana-Pacific (LPX) shares following a quarter-over-quarter revenue drop and holding for 30 days yielded a 13.05% return, significantly underperforming the benchmark, resulting in a -70.07% excess loss. The Sharpe ratio of 0.19 indicates poor risk-adjusted returns, and the maximum drawdown of -20.51% underscores the strategy's high risk. This makes it less appealing for risk-averse investors. The analysis suggests that while there may be some tactical opportunities, the approach carries substantial risk, necessitating caution.

CEO Commentary

"LP's Siding business delivered 11% revenue growth and margin expansion in the first quarter," said Brad Southern, Chairperson and Chief Executive Officer. He acknowledged the challenges posed by tariff uncertainty and a slow start to the building season but expressed optimism about the company's performance, highlighting that the Siding order file is on pace for a record second quarter. This growth is attributed to the success of ExpertFinish, share gains in new residential construction, and a recovering shed market.

Guidance

The Company expects second quarter 2025 Siding net sales to range from $445 million to $455 million, reflecting a year-over-year growth of 9-10%. For the full year 2025, Siding net sales are projected to exceed $1.7 billion, also showing growth greater than 9%. Consolidated Adjusted EBITDA is anticipated to be between $125 million and $145 million for the second quarter, and $535 million to $555 million for the full year. Capital expenditures are expected to be approximately $410 million for the year.

Additional News

In recent weeks, Louisiana-Pacific has expanded its Amazon Storefront, now including LP SmartSide ExpertFinish Trim & Siding accessories. This strategic move broadens product reach and boosts consumer convenience. Additionally, LP Building Solutions has been recognized as the 2025 Sustainable Brand Leader in the Siding category by Green Builder Media, further enhancing its brand reputation. Despite these positive developments, Truist has adjusted its price target for LP Building Solutions from $126 to $112, though the Buy rating remains, signifying ongoing investor confidence. These actions reflect Louisiana-Pacific's commitment to sustainability and market expansion.