Siding sales suffer at Louisiana-Pacific
PORTLAND Louisiana-Pacific Corp. reported Monday it lost $10 millionduring the second quarter, partly due to weak prices for its house siding.
Last year, Louisiana-Pacific earned $21 million for the quarter endedJune 30. Siding accounts for about 80 percent of L-P's revenue.
Mark Suwyn, L-P's chairman and chief executive, said that, despite theslump in siding sales, the Portland-based company's lumber and specialtywood products divisions posted strong results, reflecting the healthy constructionindustry.
Michael J. Shea, an analyst who follows the wood-products industry forCharter Investment Group in Portland, said the results were slightly betterthan analysts expected because a 70 percent increase in capacity in thepast three years has softened the siding market.
Shea said siding made of oriented-strand board has been selling for $120per thousand square feet, down 31 percent from $175 a year ago.
We are about 90 percent through the supply problem, Sheasaid. the end of 1997, we ought to be done with it.
Sales during the second quarter amounted to $633.3 million, down 4 percentfrom $658.3 million during the same period last year.
The building products company settled a major class-action lawsuit inApril 1996 calling for L-P to pay at least $275 million to replace defectivesiding manufactured in the late 1980s and early 1990s.
L-P closed an oriented-strand board plant in Chilco, Idaho, and a plywoodplant in Jasper, Texas, during the quarter. Suwyn said more closings areexpected.
L-P operates manufacturing plants in several states, Canada and Ireland.The company issued its quarterly report after the market closed Monday,when shares were at $22.25, up 31.25 cents.