In another sign of the pressure currently on building products companies, Louisiana-Pacific has announced it will suspend its $0.15 per share quarterly dividend pending improvement in the housing market.
The wood products producer most recently recorded an $81 million loss in the second quarter and a 16 percent drop in sales from the year-ago period.
The company took “significant curtailments in the quarter to match supply with orders,” said CEO Rick Frost in a prepared statement. “These shutdowns, coupled with significantly higher material costs, put downward pressure on our margins.”
LP is not alone in its decision -- other major companies have suspended dividend payments as one way to help curb costs in the down market. Most recently, Wolseley, parent of plumbing distributor Ferguson and pro dealer Stock Building Supply, opted to suspend its dividend following trouble in the North American market.