GO
Loading...

Enter multiple symbols separated by commas

James Hardie First-Quarter Profit Is Up, But Housing Clouds Outlook

Building materials group James Hardie Industries posted a 10% rise in first-quarter profit on Wednesday, despite a fall in U.S. housing construction, but warned of challenging market conditions ahead.

Hardie said its quarterly net operating profit for the period ending June 30 was US$39.1 million compared to US$35.5 million a year ago.

It said it was comfortable with bottom end of analysts' forecasts for the year to March 31, 2008, in a range between $187 million and $233 million.

Hardie, which makes about 80% of its sales in the United States, said it expected full-year earnings at the bottom end of analysts' expectations, and pointed to uncertainty in U.S. housing.

Hardie also announced it would buy back up to 10% of its issued capital or about 46.8 million shares to improve its capital structure.

It said new housing construction in North America fell in the period but pre-tax earnings at its U.S. fiber cement business rose slightly due to cost controls and improved selling prices.

"The outlook for North America is for further weakness in new housing activity through the remainder of the year," Chief Executive Louis Gries said in a statement.

The U.S. housing market is cooling off as higher interest rates and slowing demand take their toll, hitting the construction sectors as well as the broader stock market.

Hardie was once Australia's top maker of asbestos products and has been embroiled in a long-running dispute with the government over a fund it set up to make compensation payments to workers suffering from asbestos related illnesses.

Australia's corporate watchdog, the Australian Securities and Investments Commission (ASIC), in February began civil proceedings against Hardie and 10 present or former officers and directors, alleging the company made misleading statements over the asbestos compensation fund.

Hardie reiterated it did not expect the ASIC proceedings to have a material impact on its current financial statements, but they could become material in the future.

Shares in Hardie hit a life high of A$10.24 on Feb. 14, but fell after the ASIC charges. The stock closed Tuesday at A$7.50.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Dani Mathers, the 2015 Playmate of the Year, poses during a luncheon on the garden grounds of the Playboy Mansion in Los Angeles, May 14, 2015.

    Playboy on Thursday launched its completely safe-for-work mobile app Playboy NOW, part of a strategy to make more mainstream content.

  • Li Hejun, Hanergy Holding Group

    In the history of sudden wealth loss, Li Hejun may have set a new record.

  • Marc Cuban

    Ask Mark Cuban what the next big thing in technology is, you'll get an answer straight out of a science fiction film.

U.S. Video

  • Can GAP get its mojo back?

    Dorothy Lakner, Topeka Capital Markets, provides perspective on what's hurting the apparel retailer and why things are working at Old Navy.

  • This Day in History, May 22

    On this day in history, Namco's "Pac-Man" game was shown to the public in 1980, in 1992 Johnny Carson's last "Tonight Show" airs on NBC and in 2012, Yahoo sells its Alibaba stake for $7.1 billion.

  • HP to sell 51% of Tsinghua Holdings

    Brian White, Cantor Fitzgerald, takes a look inside the tech giant's quarterly results and weighs in on HP selling its majority stake in the Chinese storage and server unit.