Louisiana-Pacific’s second quarter, reported August 5, split cleanly down the middle. Siding made money on price. Oriented strand board lost money on volume, and it’s guided to keep losing it all year.
OSB segment adjusted EBITDA came in at negative $21 million, worse than the negative $14.9 million analysts modeled. Net sales in the segment fell 12% year over year. LP guided Q3 OSB EBITDA to roughly negative $45 million and full-year 2026 OSB EBITDA to about negative $120 million.
What negative OSB EBITDA means for a buyer
A commodity panel business running negative EBITDA is producing below cash cost. That isn’t a margin problem, it’s a capacity problem, and it resolves one of two ways: mills curtail, or somebody’s mill closes.
For anyone buying sheathing, the near-term read is favorable and the medium-term read is not. Prices this low don’t persist without supply leaving the market, and OSB capacity that comes offline doesn’t come back quickly. The last time North American OSB ran through this cycle, the recovery on the other side was violent.
Framing contractors and multifamily developers pricing 2027 starts should treat current sheathing numbers as a floor rather than a trend. A project like the Overlook at Garson in Atlanta, five framed stories over a podium, buys a great deal of OSB, and the gap between locking a price now and floating it into next year is real money.
Siding is a different business wearing the same logo
Siding revenue rose 4% year over year on 7% higher prices against an 11% volume decline, holding a 26% EBITDA margin. LP guided Q3 siding revenue to $460 million to $470 million with EBITDA of $110 million to $120 million.
Read those two lines together. Siding shipped 11% less product and still grew revenue, because it can price. OSB shipped into a market that prices it. That’s the entire difference between a branded building product and a commodity, and it’s why every wood products company that could has spent fifteen years trying to become a siding company.
Overall, LP posted adjusted EPS of $0.40 against a $0.64 consensus, a 37.5% miss, on revenue of $664 million, roughly 2% below the $677.3 million forecast. Total EBITDA fell 44% to $79 million.
The freight line is the one to watch
Higher freight showed up as a named drag, and it hits low-value-density products hardest. A truckload of OSB carries far less revenue than a truckload of siding, so every dollar of freight inflation eats a bigger share of the panel margin. That asymmetry is part of why the two segments diverged as sharply as they did.
It also means regional supply matters more than the national price print. A buyer close to a mill is living in a different market than one three states away, and the published composite price hides that spread. When the panel market is this thin, the freight lane is the negotiation.