Australia's James Hardie Industries <JHX.AX> on Tuesday reported smaller-than-expected growth in second-quarter profit due to disappointing sales in its North American housing segment, sending its shares down 6%.
The world's biggest fibre cement maker posted adjusted net operating profit for the quarter ended Sept. 30 of $120.5 million, up from $98.6 million reported last year but 2% below Jefferies forecast.
Homebuilding in the United States rebounded strongly in September, benefiting from historically low borrowing rates and a migration to the suburbs and low-density areas in search of more room for home offices and schooling.
However, a new wave of coronavirus infections in the country has raised fresh concerns about the recovery.
Revenue for North America fiber cement segment, the biggest driver of the company's profit, came in slightly below RBC's estimates due to lower-than-expected average selling prices.
A rise in costs for James Hardie has also remained a point of worry for analysts.
"We continue to expect SG&A (selling, general and administrative expenses) to be higher in the second half relative to the prior corresponding period for JHX to achieve internal growth targets," Jefferies said in a note.
Shares of the company fell as much as 6% to A$36.060 as of 0128 GMT, marking their worst day since May 6.
James Hardie said it would reinstate an annual ordinary dividend for fiscal year 2021 and plans to reduce gross debt by $400 million by the end of that period.
In May, the company had suspended dividend payouts indefinitely to cope with hit from closures of manufacturing plants due to coronavirus-related curbs.
The company reaffirmed its forecast for 2021 underlying net operating profit after tax of between $380 million and $420 million.
(Reporting by Shruti Sonal in Bengaluru; Editing by Arun Koyyur and Rashmi Aich)
