James Hardie shares are charging higher after a strong Q1 update…
The post James Hardie (ASX:JHX) share price jumps to record high after Q1 update appeared first on The Motley Fool Australia. –
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%.
Should you invest $1,000 in James Hardie right now?
Before you consider James Hardie, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and James Hardie wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
James Hardie (ASX:JHX) share price hits new all-time high on Thursday
Forecast crash in Aussie dollar to under US70 cents to boost these ASX 200 shares
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.