James Hardie rallies on Q3 result, UBS calls guidance upgrades 'conservative'
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More news: James Hardie shares climbed in morning trade after announcing a rise in third-quarter revenue and lifted full-year guidance.
Shares were were up 10.7% to $36.78 at 10:50am AEDT, having retreated 30% over the last 12 months.
UBS analyst Daniel Sykes called it a "solid" result but sees the FY26 guidance upgrades as "conservative".
What they said: "Result supports premium view of James Hardie's fibre cement product, showcasing its pricing power with [average sale price] in North America [fibre cement] +5% offsetting weak volume of -7% driven primarily by single family new construction," Sykes said.
"Guidance upgrade is positive but is not sufficient for 3Q beat, implying ~1% consensus downgrades for 4Q26. Looks conservative with Siding & Trim [adjusted] EBITDA margins expected to contract across both low and high scenarios."
James Hardie posts 52% profit drop for Q3 but lifts guidance
The news: Building products manufacturer James Hardie posted a 52% drop in third-quarter net income to USD68.7 million ($97.1 million), missing average forecasts of USD118.7 million, according to Visible Alpha.
Third-quarter net sales were 30% higher at USD1.2 billion, roughly level with consensus estimates. However, operating income margin fell 740 basis points, from 21.6% to 14.2%.
The company upgraded FY26 net sales guidance at its sliding and trim, and deck, rail and accessories divisions. It also upgraded its total adjusted EBITDA guidance from USD1.2-1.25 billion to USD1.23-1.26 billion.
Guidance for at least USD200 million in free cash flow remains unchanged.
What they said: "In the third-quarter, we achieved or exceeded each of our financial commitments, despite a mixed macro backdrop," said James Hardie CEO Aaron Erter.
"We are taking actions to address the current market environment, including optimizing our manufacturing footprint and better aligning our cost structure with the slower, but stabilizing, pace of demand."
The source: ASX
