James Hardie Industries plc JHX reported second-quarter fiscal 2025 results, wherein adjusted earnings per share (EPS) and sales declined from the year-ago period, given lower volumes due to weak demand in North America and Europe.

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Shares of this leader provider of high performance, low maintenance building products and solutions lost 2.75% during the trading session yesterday.

Despite volume and margin pressures across key markets, James Hardie maintained profitability through strategic price increases, operational efficiencies, and focused investments. Each region faced unique challenges, from raw material costs to economic headwinds, but effective cost management and targeted market strategies allowed the company to uphold performance. For example, the company attempted to counterbalance the volume decline with strategic price increases and investments in market share growth, particularly in North America and Australia.

James Hardie Industries PLC. Price

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Inside JHX’s Q2 Results

Net sales of $961 million decreased 4% from a year ago. This downside was due to lower market demand in North America. Also, demand remained subdued, especially in Germany, where the economic environment has been more challenging.

Adjusted operating margin declined 200 basis points (bps) from a year ago to 22% in the quarter.

Adjusted EBITDA margin of 27.4% declined 120 bps from the year-ago period.

Adjusted EPS came in at 36 cents, a decrease of 11% from 41 cents a year ago.

James Hardie’s Segmental Performance

North America Fiber Cement: Net sales dipped 5% year over year, driven by a 7% decline in volume due to weaker market demand. However, this was partly offset by an increase in average net sales price, attributed to a January 2024 price adjustment.

The EBIT margin decreased 270 bps to 29% from a year ago. Excluding depreciation, EBITDA fell 10% to $240 million, and EBITDA margin decreased 170 bps to 34.5%.

Asia Pacific Fiber Cement: James Hardie focused on gaining market share in Australia and New Zealand, seeing a modest recovery in core products. The decision to cease operations in the Philippines led to a 10% volume decline, offset by a 10% increase in the average net sales price. This resulted in net sales of $148.4 million, up 1% year over year.

Adjusted EBIT margin rose 310 bps to 33.3%, driven by a favorable geographic mix and price adjustments. Adjusted EBITDA grew 11% to $54 million, with an adjusted EBITDA margin improvement of 350 bps to 36.5%.

Europe Building Products: Markets, particularly in Germany, remained weak. Despite this, net sales only declined 1% year over year in Euros. Price increases partially offset this impact, with a 4% rise in average net sales price. This resulted in net sales of $116.6 million in the quarter, at par year over year.

EBIT margin declined 320 bps to 7.5%, with profitability mainly affected by unfavorable comparisons due to a rebate true-up from the previous year. EBITDA, excluding depreciation, fell 12% to $17 million, with an EBITDA margin decrease of 220 bps to 14.5%.

Zacks Rank & Recent Construction Releases

JHX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

TopBuild Corp. BLD reported mixed results for the third-quarter 2024, wherein its earnings topped the Zacks Consensus Estimate and sales missed the same. Nonetheless, both earnings and sales increased year over year on the back of pricing and increased volumes. TopBuild also benefited from acquisitions despite the challenges.

TopBuild has trimmed its sales and adjusted EBITDA views for 2024 due to the ongoing challenges in the housing market and delays in commercial and industrial projects. Despite this, the company remains optimistic, supported by growing demand for energy efficiency, the U.S. housing supply shortage, increasing household formations and the potential for lower interest rates to drive growth.

Masco Corporation MAS reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.

Masco lowered the upper limit of its 2024 adjusted EPS guidance due to challenged market demand.

Armstrong World Industries, Inc. AWI reported solid results for the third quarter of 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.

Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted EPS and adjusted free cash flow.

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