Australian building materials group James Hardie Industries Ltd (JHX.AX) beat forecasts for its quarterly profit on Monday on growing U.S. demand, but its shares fell as it pointed to an uncertain U.S. outlook and weaker conditions in Australia.
The world's largest maker of fiber cement products forecast full-year 2012/13 earnings before one-off items of $140-$160 million, which it said was lower than analysts' forecasts for $156-$177 million.
For the three months to June 30, James Hardie reported a net operating profit, excluding asbestos and tax adjustments, of $43.8 million, above market forecasts of $42.3 million and $39.4 million a year ago.
"They said the rate of improvement in the U.S. is uncertain and I suspect that people were hoping the outlook would be more positive," said Beulah Capital portfolio manager Tom Elliott.
"They're also saying that the market environment in Australia is deteriorating, so when you look at it there's not too much to get excited about."
James Hardie shares, which have been rising for the past two months, fell 6 percent to a one-month low.
The company said it was seeing the "very early stages" of a recovery in the U.S. residential market, one of its major export markets, but noted that the extent and rate of improvement were uncertain.
"The U.S. housing market continues to be inhibited by tight credit conditions, excess inventory, low levels of consumer confidence and elevated levels of unemployment," it said in a statement.
At the same time, the Australian housing market was deteriorating toward cyclical lows, it said.
Net sales came in at $339.7 million and earnings rose 2 percent to $57.7 million before interest and taxes, and excluding asbestos and tax adjustments.
(Reporting by Naomi Tajitsu; Editing by John Mair and Richard Pullin)