Building products maker James Hardie expects profit to be steady as housing conditions in the United States and Australia improve.
Chief executive Louis Gries said sales in the US increased 10 per cent and those in Australia have risen five per cent over the three months to June 30.
James Hardie reported first quarter operating profit of $US52 million ($56.9 million), up 19 per cent from $US43.8 million in the previous corresponding period.
Its net profit of $US142.2 million, which includes one-off items relating to its asbestos liabilities and legal matters, was up from $US68.5 million.
Advertisement James Hardie shares were 19.5 cents, or 2.1 per cent, higher at $9.47.5 in afternoon trade.
‘‘Our first quarter results reflect improved sales volumes and average net sales prices when compared to the previous corresponding quarter for both our USA and Europe and Asia Pacific Fibre Cement segments,’’ Mr Gries said in a statement.
However, the company sounded a note of caution.
‘‘Management cautions that although US housing activity has been improving for some time, market conditions remain somewhat uncertain and some input costs remain volatile,’’ the company said.
The company expects full year earnings, excluding asbestos and legal items, asset impairments and tax adjustments to be between $US165 million and $US194 million for the year ending March 31, 2014.
This is broadly in line with earnings of $US181 million recorded in the previous year.
James Hardie derives most of its earnings from the US, where it has seen a continuing increase in the number of housing starts as well as improving house values.
Morningstar analyst Nathan Zaia said the the company’s sales figures were a little higher than expected, while its margins had also improved.
‘‘After recent margin weakness, partly attributable to costs in adding capacity and improving plant efficiency, it’s comforting to see the benefits start to flow through,’’ he said.
Recent efficiencies, improvements in cost and price would help the company as the housing market picked up, he said.
CAA Price at posting:
17.5¢ Sentiment: LT Buy Disclosure: Held
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