James Hardie (JHX) shares have climbed after the building products maker reported a strong jump in second quarter earnings.
The company, which operates mostly in the US these days, has maintained earnings guidance for the full year despite the solid rebound in the September quarter.
James Hardie shares rose more than 4%, to $12.52.
Hardie, which generates two-thirds of its revenue in Europe and the United States, reported net operating profit of $US127.2 million ($145.8 million) for September quarter, up from $US51.9 million a year ago.
Chief Executive Officer Louis Gries said the sharp improvement reflected increased volumes and higher average net sales prices across its US, European and Asian fibre cement businesses.
The 66% jump in earnings for the quarter helped offset the weak first quarter which left earnings for the six months to September 30 down 20% at $US156.1 million, from $US194.1 million in the first six months of 2013-14.
Underlying profit for the quarter though (after stripping out one offs) was up 7% to $US115.5 million.
Net sales of $US857.2 million, rose 12% from the $US764.2 million in the first half of last year.
An unchanged interim dividend of 8 US cents a share will be paid. That will be unfranked in Australia.
JHX YTD – James Hardie profit rises
Mr Gries said “The recovery of the US housing market remains below our expectations at the beginning of the year.”
"Housing is not recovering at the anticipated rate," he told analysts’yesterday.
"We believe that housing is going to continue to increase rather than go into a downturn."
Australian sales are expected to improve, as demand for detached housing grows.
But Mr Gries said James Hardie wasn’t as well placed to capitalise on rising apartment building activity in Australia.
"It doesn’t play as well to our strengths as we’d like," he said.
However, he said Hardie is it hopeful about its full year outlook, predicting a moderate improvement in the US for 2014-15.
James Hardie said it was still forecasting a net operating profit of between $US205 million and $US235 million for the financial year to March, 2015.
