Building products group, James Hardie (ASX:JHX), has reaffirmed its 2025 guidance after a solid first-quarter performance for the three months to June.
However, there’s no sign of any expectation of an improvement in full-year earnings from the lower figure guided to earlier this year.
Full-year guidance remains adjusted income in the range of US$437 million to US$485 million. That’s below the US$490 million reported for 2023-24, but the market was aware of this when the full-year figures were released.
The company said sales rose in the US and Europe in both revenue and volume terms but were lower in Asia Pacific (mostly Australia) due to a 9% drop in volumes. A 7% jump in prices reduced the fall in revenue to around 2%.
Net sales for the quarter totaled US$687 million, up 4%, but earnings before interest and tax (EBIT) increased by just 1% to US$163.1 million.
That saw net profit fall 2% to US$107.7 million.
Adjusted net income rose 2% to US$123.1 million, with a forecast for adjusted net income in the current second quarter to be in the range of US$93.5 million to US$107.7 million. This indicates a significant drop in earnings for the company.
Adjusted net income in the June 2023-24 quarter was just over US$123.1 million, so the company is facing a potential profit drop of US$16 to US$29 million in the current quarter.
Notably absent from James Hardie CEO Aaron Erter’s ASX statement was any mention of this potential decline.
Instead, Erter said, “We achieved a solid start to our financial year, enabled by our teams’ focus on safely delivering the highest quality products, solutions, and services to our customers. We are executing on our strategy, delivering on our commitments, and managing decisively as we continue to scale the organisation and invest to profitably grow our business.”
He added, “Our solid first-quarter results, coupled with our continued execution against our strategic priorities, underpins our confidence in reaffirming our full-year guidance.
We continue to expect the North American market for exterior products to be down low to mid-single digits over the course of our financial year, and now anticipate that the market backdrop will be particularly challenging during our fiscal second quarter.
However, despite these headwinds, we remain well-positioned to achieve full-year results within the ranges we provided at the beginning of the year, and our teams are working relentlessly to leverage our strong value proposition to sustain our leading position in the industry and accelerate our outperformance as markets transition to recovery.”