Ahead Of The Bell: Louisiana-Pacific Shares Fall

NEW YORK (AP) — Shares of Louisiana-Pacific Corp. fell Tuesday after the wood products company said it will sell 18 million shares of its common stock through a public offering, a move that may dilute the stakes of existing stockholders.

Besides diluting the value of existing shares, the move will result in fees and expenses, which cuts into potential earnings.

The Nashville, Tenn., company, which has roughly 103.8 million shares outstanding, aims to use net proceeds of the share offering to pay down debt.

It intends to retire as much as 35 percent of its senior secured notes due 2017 and to go toward general corporate purposes.

Longbow analyst Joshua Zaret, who has a "Neutral" rating on the stock, estimated proceeds from the stock offering at about $128 million.

He also raised his earnings-per-share estimates based on the company's updated outlook of operating income for each of its three segments. Louisiana-Pacific said late Thursday that its oriented strand board business will lose between $8 million and $10 million compared to the year-earlier loss of $27 million. The company's siding business will earn between $14 million to $16 million compared to a $4.6 million operating income in the year-earlier period. And the engineered wood products unit will post a loss of $8 million to $10 million compared to a loss in the year-earlier period of $11 million.