James Hardie has lifted third quarter profit on the back of growth in the US and Europe, but the building products supplier said housing market conditions remain uncertain in its main US market.
The company reported a 16 per cent increase in operating profit for the December quarter to $US56.2 million ($A78.58 million) as it increased sales and boosted margins in its fibre cements business in US and Europe.
Sales for the quarter rose seven per cent to $US413.9 million.
The company also lifted the lower end of its full year guidance range, on a continuing recovery in the US market. It now expects operating profit between $US240 million and $US250 million, instead of its earlier forecast of $US230 million and $US250 million.
The announcement lifted shares in the company, adding 47 cents, or 2.82 per cent, to $17.14.
"All of our businesses continue to provide strong financial results, primarily driven by higher volumes and lower production costs within our North America and Europe Fiber Cement business," chief executive Louis Gries said.
He warned, however, that the outlook remained in balance, with volume growth expected to be modest.
"Although US housing activity has been improving, market conditions remain somewhat uncertain and some input costs remain volatile. It is expected to take several quarters to lift our growth rate back to targeted levels," he said on an analyst call after the results.
The group had downgraded its earnings forecast by up to $US20 million in November, citing below-target growth in the US housing market.
James Hardie, which makes fibre cement building products such as wallboards and sidings, gets the majority of its earnings in the US.
The company's quarterly net profit, including the volatile impact of asbestos liabilities, was down 76 per cent from a year ago to $US25.4 million.
Within its Asia-Pacific business, James Hardie said while sales in Australia, New Zealand and the Philippines rose in the December quarter, a sharp appreciation of the US dollar had an adverse effect on the results.
The company in November completed an $89 million expansion of its Queensland fibre cement manufacturing facility, that will boost Australian capacity by 40 per cent to meet strong domestic demand.
US, EUROPE GROWTH BOOSTS JAMES HARDIE Q3
* Net profit down 76 pct to $US25.4 mln
* Adjusted operating profit up 16 pct to $US56.2 mln
* Sales up 7 pct to $US413.9 mln
* Asbestos Injuries Compensation Fund claims received 159 vs 170
* Average claim settlement was $275,000, up 10 pct
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