James Hardie’s Stock Sailed In The Red Zone Despite Some Decent Updates

James Hardie’s Stock Sailed In The Red Zone Despite Some Decent Updates

James Hardie Industries Plc (ASX: JHX) on 1 February 2019 updated that Dr. Jack Truong, previously announced as the CEO successor on 7 September 2018, has been officially appointed as the CEO, and to the Board of Directors, effective from 31 January 2019. On his formal appointment, Dr. Truong said that he would like to thank Louis and the entire JHX team for their commitment to a successful transition. He added that he is thrilled to undertake the task of heading the next stage of the company’s way towards development. On 5 February 2019, Matthew Marsh, CFO, JHX along with Dr. Jack Truong will present Q3 FY19 report in Sydney. 

The results for the second quarter of FY19  and the half year ended 30 September 2018 (HFY19) were published by JHX on 8 November 2018. The net sales for the quarter and 6 months rose 23% and 25%, respectively, from the previous corresponding periods to US$644.6 million and US$1,295.6 million, respectively. The Gross profit of US$207.1 million for the quarter and US$428.2 million for the 6 months represented a growth of 11% and 20%, respectively (over the prior corresponding periods). The gross profit margin of 32.1% for the quarter and 33.1% for the 6 months were down 3.5 percentage points and 1.4 percentage points, respectively (compared with the previous corresponding periods).

The Selling, general and administrative expenses for the quarter and 6 months rose 32% and 37%, respectively (compared to the prior corresponding periods). The Net operating profit for the quarter, was majorly driven by the favorable movement in asbestos adjustments and higher gross profit.

The operating results for the North America Fiber Cement segment showed that the Net sales for the quarter and 6 months were favorably impacted by higher sales volumes and an increased average net sales price compared to previous corresponding periods. The rise in volume includes growth in exteriors for the quarter and 6 months of 8% and 7%, respectively, compared to the previous corresponding periods, reflecting growth above its market index. This increase was partially offset by a decrease in interiors volume for the quarter and the half year of 6% and 2%, respectively.

According to the US Census Bureau, individual family housing starts for the quarter were 235,600, or 2% above the prior corresponding period, and for the half year ended 30 September 2018, single-family housing starts were 492,900, or 5% above the previous corresponding period.

Fiber cement net sales in US dollars for the quarter and half year increased 3% and 9%, respectively, compared to the prior corresponding periods, primarily driven by higher volume, partially offset by a lower average net sales price in US dollars. The lower average net sales price for the quarter and half year were driven by the unfavorable impact of foreign exchange rates on their US dollar reported sales, partially offset by an increase in price and favorable product mix. In Australian dollars, the average net sales price for the quarter and half year increased 2% and 1%, respectively.

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Meanwhile, the group has also announced about few changes in substantial holding. Looking at the company’s stock performance, the stock has generated a negative return of 18.41% during the past three months. The shares of JHX closed the day’s session (1 February 2019) at A$15.140, down by 1.239 % or 0.190 points as compared to the previous day close of A$15.330. The stock price day’s high was noted at A$15.400 and day’s low at A$14.980. JHX has a market capitalization of circa $6.85 billion. The 52-week high and low prices of the company’s stock are marked at A$24.190 and A$14.380 respectively.


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