Australian building products maker James Hardie Industries posted third-quarter profit below forecasts and gave a downbeat outlook, saying there were few signs of sustainable recovery in the key U.S. housing market.
James Hardie, which earns two-thirds of revenue in the United States and Europe, said its net operating profit for the three months to Dec. 31, excluding asbestos and tax adjustments, rose 32 percent to $27.7 million from $21 million, helped by increased market share, efficiency gains and cost-cutting.
That was below analyst forecasts of $31.7 million, according to a Reuters survey of three analysts.
The group affirmed its earnings guidance for the year in the range of $130 million to $140 million.
In Australia, the housing market remained weak despite official cuts in interest rates and a near-term pick-up in construction was not anticipated, the company said.
"Overall demand in the U.S. residential housing construction market is still relatively subdued and there remains little evidence that a sustainable recovery is underway," James Hardie said in a statement.
Including asbestos-related expenses and tax adjustments, James Hardie said its net operating loss narrowed to $4.8 million in the third quarter from $26.4 million a year earlier.
Rival building products maker Boral on Tuesday posted a 28 percent slide in first-half profit, pointing to "significant declines" in the Australian residential housing market.
Boral said it expected the challenging economic conditions to continue in Australia in the second half.
The company said group profit after tax, excluding one-off items, fell 28 percent to A$67 million. That was in line with three analyst forecasts which ranged from A$66.5 million to A$70.3 million.
The group's largest division, construction materials which supplies concrete, asphalt and quarry materials, posted a 4 percent decline in earnings due to fewer high-margin projects.
Building products saw earnings slide 37 percent as demand in the new build residential housing market slumped.
Full-year net profit before items was expected at A$150 million to A$175 million, Boral said.