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Why Louisiana-Pacific Corporation (LPX) Is Higher on Thursday

Stocks in this article: LPX

NEW YORK (TheStreet) -- Louisiana-Pacific Corporation (LPX) climbed after the building materials manufacturer posted better-than-expected top-line growth.

By midafternoon, shares had added 6.7% to $18.25. Trading volume of 5.2 million exceeded its three-month daily average of 2.8 million.

The Tennessee-based company reported quarterly sales of $480 million, 6% higher than the year-ago quarter, and a 23% boost to full-year revenue of $2.1 billion. Analysts surveyed by Thomson Reuters had forecast fourth-quarter and full-year sales of $456 million and $2.08 billion, respectively.

"At about 920,000 housing starts in 2013, LP shipped record volumes of our SmartSide siding and a variety of value-added [oriented-strand board] products. This performance bodes well for the future as housing continues to improve," said CEO Curt Stevens in a statement.

Investor sentiment for construction-exposed stocks has been high over the week, after building supplies company Owens Corning  (OC) and construction machinery maker Deere & Co.  (DE) reported positive growth in segments benefiting from a housing recovery.

Better-than-expected revenue reduced the impact of a quarterly loss of 5 cents a share, compared to net income of 18 cents a share in the year-ago quarter. The company said its largest segment, oriented-strand boards, saw volumes increase 17% while prices decreased 20%.

"The decrease in selling price unfavorably impacted operating results and adjusted EBITDA from continuing operations by approximately $55 million for the quarter as compared to the fourth quarter of 2012," the company said in a statement.

In response to market conditions, the company has indefinitely curtailed one of its structural panel products facilities. It still has 10 facilities in operation.

Also see: Owens Corning Posts Better-Than-Expected Fourth Quarter

Also see: Farm Slowdown Fears Weigh on Deere & Co.

TheStreet Ratings team rates LOUISIANA-PACIFIC CORP as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate LOUISIANA-PACIFIC CORP (LPX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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