James Hardie (ASX:JHX) share price jumps to record high after Q1 update

James Hardie shares are charging higher after a strong Q1 update…

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In morning trade, the James Hardie Industries plc (ASX: JHX) share price is surging higher following the release of its first quarter results.

At the time of writing, the building materials company's shares are up 6% to a record high of $50.72.

James Hardie share price hits record high after strong Q1 update

  • Sales up 35% over the prior corresponding period to US$843.3 million
  • Adjusted earnings before interest and tax (EBIT) jumped 45% to $180.5 million
  • Net income up 50% to US$134.2 million
  • Operating cash flow down 3% to US$184.1 million
  • Full year net income guidance upgraded

What happened in the first quarter for James Hardie?

As you might have guessed from the performance of the James Hardie share price today, the company has started FY 2022 in a very positive fashion.

Strong sales growth across its North American Fiber Cement, Europe Building Products, and Asia Pacific Fiber Cement segments drove a 35% increase in group sales for the quarter. Management notes that all three regions are starting to build momentum on executing the global strategy of driving high value product mix penetration.

And thanks to a 150-basis points expansion in its adjusted EBIT margin, its earnings growth was even stronger. Net income rose 50% over the same period last year.

What did management say?

James Hardie's CEO, Dr Jack Truong, was pleased with the company's performance during the first quarter.

He said: "I am very pleased that this first quarter marked our ninth consecutive quarter of delivering growth above market and strong returns. In our investor day at the end of May, we described our three critical initiatives for fiscal year 2022 through fiscal year 2024: (1) market directly to homeowners to accelerate demand creation, (2) penetrate and drive profitable growth in existing and new segments and (3) commercialize global innovations by expanding into new categories. Further, we discussed our focus on driving a high value product mix in all three regions."

"We are making good progress on our stated global strategy. Globally, we continue to enable our customers to make more money by selling more James Hardie products. Our high value product mix provides homeowners with products that combine long lasting beauty and endless design possibilities, with trusted protection and low maintenance." Dr. Truong added.

What's next for James Hardie?

Also giving the James Hardie share price a boost today was the company's outlook for FY 2022.

Based on the continued, strong execution of its global strategy across all three regions and the expectation for continued residential and market growth in the USA, James Hardie has lifted its FY 2022 earnings guidance.

Management now expects FY 2022 adjusted net income to be between US$550 million and US$590 million in FY 2022. This compares to its previous guidance of US$520 million and US$570 million. It will also be an increase of 20% to 29% on FY 2021's adjusted net income of US$458 million.

The James Hardie share price is smashing the market in 2021

Following today's gain, the James Hardie share price is up a massive 31% in 2021. This means the company's shares are outperforming the ASX 200 by an impressive 28%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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