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What to Expect From Louisiana-Pacific's (LPX) Q3 Earnings

Solid housing, and repair and remodel markets are likely to aid Louisiana-Pacific's (LPX) Q3 results despite supply-related issues.

This story originally appeared on Zacks

Louisiana-Pacific Corporation LPX is slated to report third-quarter 2021 results on Nov 2, before the market opens.

In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 7.7% and 9.8%, respectively. Its earnings and revenues rose significantly from the year-ago reported figures.

It is to be noted that earnings surpassed the consensus mark in each of the trailing six quarters.

- Zacks

Trend in Estimates

The Zacks Consensus Estimate for Louisiana-Pacific’s third-quarter earnings is pegged at $3.34 per share, implying an improvement of 114.1% on a year-over-year basis. The consensus estimate for revenues is $1.03 billion, indicating 29.4% year-over-year growth.

Factors at Play

Louisiana-Pacific’s earnings and sales are expected to have witnessed solid growth in third-quarter 2021 on the back of robust housing, and repair and remodel markets. Also, robust Siding business and favorable Oriented Strand Board (OSB) prices are likely to have added to the positives.

Its strategic business transformation, effective cash management and inorganic moves are likely to benefit the to-be-reported quarter’s results. Yet, higher freight and transport costs along with rising input costs are expected to weigh on the same.

During the second-quarter 2021 earnings call, the company projected OSB prices for the third quarter to be 10% lower sequentially. Also, it expects Siding Solutions revenue growth to be 10% from the year-ago period. Given these positives, the company projects consolidated adjusted EBITDA for the quarter to be $530 million.

What the Zacks Model Says

Our proven model predicts an earnings beat for Louisiana-Pacific this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of -2.79%.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

KBR, Inc. KBR has an Earnings ESP of +2.66% and a Zacks Rank #2 at present.

Jacobs Engineering Group Inc. J has an Earnings ESP of +6.49% and a Zacks Rank #2.

North American Construction Group Ltd. NOA has an Earnings ESP of +0.88% and a Zacks Rank #2 currently.

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