Brighter outlook lifts James Hardie shares

Building products group James Hardie has lifted its full-year guidance following a better-than-expected second quarter.

James Hardie has revised its full-year adjusted net profit guidance to at least $US635m.

Building products group James Hardie has lifted its full-year guidance following a better-than-expected second quarter and a rosier outlook that sent the company’s shares higher.

The company posted a 12 per cent fall in adjusted net profit in the second quarter to $US157m ($240m), due to a 4 per cent decline in sales to $US960.8m.

However the result exceeded analyst expectations and the result was an improvement on the company’s earlier guidance of $US135m-$US155m.

The company said it expected to deliver even better profitability for the remainder of the year, despite “greater market headwinds” than it had anticipated in its initial outlook. The rosier outlook sent the shares 6 per cent higher to close at $53.42.

Chief executive Aaron Erter said the first-half result came amid a “challenging demand environment”.

“Our teams continue to find opportunities to be more efficient as we prioritise our investments in scale and future growth,” he said. “We are encouraged by the prospect of improvements in consumer sentiment and homeowner affordability as borrowing costs normalise.

“However within our current fiscal year we continue to expect the North American market for exterior products to be down low to mid-single digits.”

James Hardie’s North American fibre cement division brought in sales of $US695.8m in the second quarter, down from $US734.4m in the corresponding period of the previous year.

Group sales for the first half were flat at $US1.95bn, while adjusted net profit was down 5 per cent to $US334.6m.

The company revised its full-year adjusted net profit guidance to at least $US635m, compared with earlier estimates of $US630m-$US700m, as its focus on cost management “enables us to achieve even better profitability than we initially anticipated”.

James Hardie Industries chair Anne Lloyd and chief executive Aaron Erter.

Macquarie analysts said the company’s cost management was a “standout” in the latest results update, while the timing of the market recovery in the US remained a “key uncertainty”.

Uncertainty over interest rates, especially in North America, has discouraged homeowners from shifting houses or undertaking renovations.

James Hardie said it expected its North American business to deliver improved sales and earnings in 2025-26.

“We are planning for recovery and growth in both repair and remodel and new construction,” Mr Erter said. “Our teams continuously evolve our plans to deliver sustained market outperformance and capture the value that our products demand.”

The company also launched a new $US300m share buyback, after repurchasing 4.5 million shares for $US149.9m in the six months to September.

Originally published as Brighter outlook lifts James Hardie shares