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Why the James Hardie Industries plc share price is falling today

The James Hardie Industries plc (ASX: JHX) share price fell 4.5% today after the US homebuilder and building materials supplier revealed its financial results for the year ending March 31 2017.

Below is a summary of the results with comparisons to the prior corresponding year. All figures in U.S. dollars.

  • Net profit of $276.5 million, up 13%
  • Adjusted net profit of $248.6 million, up 2%
  • Net sales of $1,921 million, up 11%
  • A second half of FY 2017 dividend of 28 cents per security
  • Total full year dividends of 38 cents per security
  • Q4 FY 2017 net profit of $54.6 million, down 6%

This is another solid looking result from a business that is enjoying the tailwinds of resurgent U.S. housing markets, with some strong sales growth, not translating quite so well to the bottom line.

The group blamed the margin compression on higher manufacturing costs in the U.S. and increased investment in “marketing development programs”. It is these higher costs that are probably dragging the share price down this afternoon.

Outlook

The company stated that it expects “modest market growth” in U.S. housing markets to continue with the Australian and New Zealand businesses also expected to trend broadly in line with the average growth in housing construction markets.

James Hardie shares have nearly tripled in value over the past 5 years thanks to the housing boom in the U.S. and Australia, but it’s not the only one enjoying that tailwind. Others to consider with perhaps better long-term growth outlooks include DuluxGroup Limited (ASX: DLX) or Nick Scali Limited (ASX: NCK).

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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