Louisiana-Pacific Q1 Earnings Call Highlights

Key Points

• Louisiana-Pacific met its first-quarter guidance despite weak housing conditions and softer OSB demand, with stronger siding and OSB pricing helping offset lower volumes. Adjusted EBITDA came in at $82 million, down sharply year over year, and the company returned $21 million to shareholders.
• The biggest drag was OSB pricing, which fell 28% from a year ago and reduced EBITDA by $66 million. LP said the OSB business remains cyclical and emphasized cost control and efficiency while waiting for a demand recovery.
• SmartSide siding remains a growth focus, with new builder partnerships and expansion plans supporting share gains. LP also cut its full-year outlook, citing weaker housing indicators, lower consumer confidence and added costs from oil-related freight and raw materials.

Louisiana-Pacific NYSE: LPX said it met its first-quarter 2026 guidance despite weaker housing conditions, softer OSB demand and commodity price pressure, with stronger-than-expected pricing in both siding and oriented strand board helping offset lower volumes.

Chief Executive Officer Jason Ringblom said the company “navigated the challenges of a complex market exceptionally well,” citing an “increasingly volatile macro backdrop” and impacts from winter storms and the conflict in Iran. LP reported adjusted EBITDA of $82 million for the quarter, down $80 million from the prior-year period, and adjusted earnings per share of $0.38. The company returned $21 million to shareholders through dividends.

Ringblom said the year-over-year EBITDA decline was primarily driven by a $66 million impact from lower OSB prices, which also reduced net sales. Siding EBITDA declined by $5 million despite a 10% decrease in net sales, while other factors, including South America and higher unallocated corporate expenses, accounted for the remaining decline.

The company also highlighted safety performance, with North American employees working more than 1.5 million hours at a total incident rate of 0.26. Ringblom also noted that LP’s Sagola, Michigan, siding mill reached two years without a recordable injury.

Siding Volumes Fall, Pricing Offsets Some Pressure

Chief Financial Officer Alan Haughie said siding unit volumes fell 18% year over year in the quarter, in line with expectations. The decline reflected a slower market and elevated channel inventory that followed the company’s January price increase announcement, particularly among distributors serving shed customers.

Siding selling prices rose 9%, including an 8% increase in primed products and a 10% increase in ExpertFinish. Haughie said the January list price increase accounted for roughly 4 to 5 percentage points of the increase, with the remainder coming from mix and rebate refinements.

ExpertFinish remained the strongest product category within siding, with volumes flat in the quarter. Ringblom said ExpertFinish accounted for 12% of siding volume and 18% of siding revenue in the first quarter. The company is expanding capacity for the product line, including a new line in Green Bay, Wisconsin, that adds about 50 million square feet of annual capacity, or roughly 25%. LP also plans to add 20 million square feet of capacity at its Bath, New York, facility later this year and recently acquired land in North Branch, Minnesota, for future ExpertFinish expansion.

Ringblom said the shed market was affected by pre-buying ahead of the January price increase, which elevated inventories entering the quarter. However, he said sell-through rates “held up quite well,” and channel inventory has returned to seasonally normal ranges.

OSB Results Weighed Down by Lower Prices

LP’s OSB segment remained under pressure from commodity pricing. Haughie said OSB prices were 28% lower than in the first quarter of the prior year, reducing revenue and EBITDA by $66 million. Lower volumes in both commodity OSB and Structural Solutions reduced sales by another $30 million and EBITDA by $10 million.

The OSB segment posted an EBITDA loss of $12 million, which Haughie said was better than the company’s guidance in a difficult pricing and demand environment. He credited the operations team with controlling costs, operating efficiently and prioritizing safety.

Ringblom said LP’s OSB strategy has not changed, describing the business as cyclical and saying the company is focused on discipline, cost control and efficiency while preparing for an eventual demand recovery.

Builder Partnerships and Market Share Opportunities

LP said it has secured two new partnerships with national homebuilders so far in 2026. Ringblom said the company expects to supply about 100 million square feet of SmartSide in total to 15 of the top 25 U.S. homebuilders this year. He said that represents a high-single-digit share of those builders’ exterior market and a similar high-single-digit share of LP’s overall SmartSide volume.

During the question-and-answer session, Ringblom said the 100 million square feet expected for 2026 represents an increase of more than 10% from the prior year. He said the new programs give LP access to under-penetrated markets, particularly in the Southeast and Southwest, and create opportunities for builders and installers to experience SmartSide.

Ringblom also said LP’s integration of its OSB and siding businesses has helped it be “more creative, more flexible, more responsive” in tailoring programs for customers. He said the company sees significant opportunity to expand its presence with large builders from its current high-single-digit position.

Oil Costs, Freight and Guidance

Management said crude oil volatility had minimal impact in the first quarter, though freight rates increased modestly as diesel prices responded to supply disruptions. Haughie said LP estimates that each $10-per-barrel increase in crude oil corresponds to a roughly $0.03-per-mile increase in variable freight costs, or about $1 million annually based on 2025 freight usage.

For raw materials excluding logs, Haughie said each $10-per-barrel increase in crude oil is estimated to add $1.5 million to $2 million per quarter, or $6 million to $8 million annually, across the North American business. About 75% of that impact would fall in siding and 25% in OSB.

LP reduced its expectations for the second half of the year, citing weak housing market indicators, declining consumer confidence and higher uncertainty following the conflict in Iran. Haughie said the company’s prior full-year outlook assumed housing starts would be flat year over year, which would require a second-half rebound that has not yet shown signs of developing.

• For the second quarter, LP expects siding revenue of $435 million to $445 million and siding EBITDA of $115 million to $120 million.
• For the full year, LP expects siding revenue of $1.64 billion to $1.66 billion and siding EBITDA of $410 million to $425 million.
• LP expects OSB EBITDA to be a loss of about $10 million in the second quarter, assuming prices remain at the prior Friday’s printed level.

In response to an analyst question, Haughie said the reduction in full-year siding EBITDA guidance from the prior midpoint was roughly $50 million, including about $35 million from volume and roughly $15 million from oil-related costs.

Haughie said LP ended the quarter with $164 million in cash and $900 million in liquidity, including its undrawn revolver. Operating cash flow was a $38 million outflow, compared with a $64 million inflow a year earlier, reflecting lower EBITDA and a larger-than-usual log inventory build.

Management said it remains confident in SmartSide’s value proposition and the long-term ability of the siding business to gain share across the markets it serves, even as near-term housing demand and OSB pricing remain under pressure.

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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