Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of building products specialist Louisiana-Pacific
So what: When LP announced third-quarter earnings today, the results didn't look particularly good. On an adjusted basis, the company lost $0.09 per share during the quarter. Depending on where you look, that either met or slightly exceeded Wall Street's expectations. However, sales of $323 million fell short of analysts' hopes, and on an unadjusted basis, LP's loss from continuing operations widened from $13 million last year to $31 million this year. The company's additional 30 million shares outstanding compared to last year helped soften this loss on a per-share basis.
Now what: Since LP's products are primarily used in new home construction and repair and remodeling, how bright can the outlook really be? LP CEO Rick Frost pretty much summed it up: "We continue to believe the recovery in housing construction will be erratic." So why the big jump in shares today? Investors could be cheering the fact that results weren't worse than they were, along with the company's note that building activity picked up a bit in September. Also, LP's stock has also been heavily shorted, which could now prompt shorts hoping for even uglier results to head for the exits.
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