James Hardie Industries (JHX +0.00%) is feeling the pressure from a difficult housing cycle. Shares of the building materials manufacturer traded down 15% as of 1 p.m. ET Tuesday following the release of the company's latest quarterly report.
Sales growth in a subdued market
James Hardie is an Australian manufacturer of construction materials best known for its Hardie Board fiber-cement house siding. The company earned $0.40 in the quarter on revenue of $1 billion, or about $10 million less than the analyst consensus estimate.
For its full fiscal year ending March 31, James Hardie saw sales grow by 4%.
James Hardie's fortunes are tied closely to the housing and renovation markets, which have cooled in the U.S. and elsewhere due to rising interest rates. The company said it expects demand from its largest market, North America, to decrease by 2% in calendar 2024 compared to 2023.
NYSE: JHX
Key Data Points
Is James Hardie stock a buy?
It's worth noting that the company continues to grow revenue in a tough market, implying that James Hardie is having some success outperforming overall demand and perhaps taking market share. Cement fiber is considered superior to traditional alternatives due to its durability, but it also tends to cost more to install.
The company sells into cyclical markets, and James Hardie can only do so much to offset the cycle.
With Tuesday's declines, the stock is now 25% off its high for 2024. Expectations are being reset, and with any luck, the stock doesn't have much further to fall. Investors buying in now will need to have patience as they ride out the cycle.
