LOUISIANA-PACIFIC CORP (NYSE:LPX) reported fourth-quarter results that fell short of analyst revenue expectations but delivered a positive surprise on the bottom line, as its high-margin Siding segment continued to show strength against a backdrop of severe weakness in its commodity-oriented Oriented Strand Board (OSB) business. The company's initial guidance for 2026 suggests a challenging start to the year, particularly for OSB, before an anticipated recovery.
Earnings and Revenue Versus Estimates
For the quarter ended December 31, 2025, LPX reported a net loss of $8 million, or $0.11 per diluted share. On an adjusted basis, which excludes certain one-time items, earnings came in at $0.03 per diluted share. This figure notably exceeded the analyst consensus estimate of $0.01 per share.
On the top line, the story was different. Consolidated net sales for Q4 2025 were $567 million, a decline of 17% year-over-year. This result missed the analyst revenue estimate of approximately $600 million. The divergence between the EPS beat and the revenue miss is explained by the company's two distinct business segments performing in opposite directions.
- Siding Segment: Net sales increased 6% to $384 million, driven by an 8% rise in average selling prices. Adjusted EBITDA for the segment grew 33% to $97 million, reflecting strong pricing and favorable product mix.
- OSB Segment: Net sales plummeted 49% to $136 million, crushed by a 25% drop in average selling prices and a 24% decline in shipment volumes. The segment posted an Adjusted EBITDA loss of $39 million, compared to a $50 million profit in the prior-year quarter.
Market Reaction and Price Action
The stock's reaction in pre-market trading was negative, with shares down approximately 1.4%. This initial move suggests investors are focusing on the broader challenges outlined in the report and the company's near-term outlook rather than the adjusted EPS beat. The market appears to be weighing the following factors:
- The significant miss on overall revenue.
- The deep losses in the OSB segment, a historically volatile but major profit driver during strong pricing cycles.
- A first-quarter 2026 outlook that projects continued pressure.
2026 Outlook Versus Analyst Expectations
Management provided financial guidance for the first quarter and full year 2026, offering a mixed picture when held against current analyst forecasts.
For the first quarter of 2026, LPX expects:
- Siding sales of approximately $350-$355 million, implying a year-over-year decline of about 12%.
- Consolidated Adjusted EBITDA of around $50 million, with the Siding segment contributing $80-$85 million and the OSB segment projected to post a loss of $25-$30 million.
This Q1 outlook appears soft compared to analyst estimates, which had projected sales near $672.6 million and revenue growth expectations that likely anticipated less severe segment declines.
For the full year 2026, the company anticipates:
- Siding sales of approximately $1.7 billion, representing roughly 2% growth.
- Consolidated Adjusted EBITDA of $430 million, with Siding contributing $450 million at a robust 26% margin and the OSB segment expected to break even.
The full-year sales guidance of ~$1.7 billion for Siding is a key figure, as it aligns with the company's reported segment result for all of 2025. The overall consolidated sales outlook was not provided in the release. Analyst estimates for full-year 2026 sales stood at $2.9 billion. The company's guidance implies that OSB and other businesses would need to contribute approximately $1.2 billion to meet that consensus, which may be viewed as ambitious given the breakeven EBITDA target for OSB.
Press Release Summary
The earnings report highlighted a tale of two businesses in 2025. For the full year, the resilient Siding segment grew sales by 8% to $1.69 billion and increased Adjusted EBITDA by 14% to $444 million. In stark contrast, the commodity OSB segment saw sales fall 30% to $832 million, with Adjusted EBITDA collapsing 98% to just $7 million due to sharply lower prices and volumes.
Capital allocation remained a priority, with the company repurchasing $61 million of its stock, paying $78 million in dividends, and announcing a 7% increase in its quarterly dividend to $0.30 per share. Total liquidity remained strong at approximately $1 billion.
Conclusion
Louisiana-Pacific's fourth-quarter results underscore its ongoing strategic transition. The company's premium Siding business is delivering solid profitability and growth, effectively acting as a stabilizer. However, it is not yet large enough to fully offset the cyclical devastation currently hitting its OSB operations. The market's negative initial reaction reflects concerns over the depth of the OSB downturn and the company's cautious near-term guidance. Investors will be watching closely for signs of stabilization in OSB pricing, as the company's full-year profitability hinges on this segment moving back toward breakeven as projected.
For a detailed look at historical earnings, future estimates, and analyst projections, visit the LPX earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor a recommendation to buy or sell any security. Investing involves risk, including the potential loss of principal.
