The James Hardie Industries plc (ASX: JHX) share price is climbing today after an upgraded guidance for FY21.
The news has sent the James Hardie share price to $36.52, up 3.69%. This compares to the S&P/ASX 200 Index (ASX: XJO) which is down 0.1% to 6,191 points.
Let's take a look at what James Hardie does and what it reported today.
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What does James Hardie do?
James Hardie is a manufacturer of fibre cement siding and backerboard. The fibre cement product is used in a number of markets, including residential construction, manufactured housing, repair and remodelling as well as commercial applications.
The company operates in the United States, Australia, New Zealand, the Philippines, Europe and Canada.
Upgraded guidance
James Hardie raised its net operating profit after tax (NOPAT) guidance for FY21. The adjusted guidance range to be between US$380 million and US$420 million.
For the second quarter, the company anticipates group net sales to jump around 12% between US$735 million and US$740 million. Group adjusted earnings before interest and tax (EBIT) is also expected to increase by approximately 22%, representing an amount between US$160 million and US$165 million.
James Hardie noted that the second quarter result would see its key financial metrics at all-time quarterly highs.
The record performance is expected to be made possible by growth in all geographical markets. The company noted this would be the first time North America, Asia Pacific and Europe had all provided strong returns.
James Hardie CEO, Dr Jack Truong welcomed the result, saying:
This is the sixth consecutive quarter that we have delivered growth above market with strong returns. We continue to achieve these results by executing better every day against our strategic imperatives and seamlessly serving our customers, while improving working capital for our customers and for the company.
LEAN manufacturing
In addition to the upgraded guidance, James Hardie advised it had made significant progress on its internal efficiencies. The company's LEAN manufacturing transformation and Zero-harm focus has created demand for its premium-quality products. The fibre cement and fibre gypsum building materials are said to be the preferred brand for homeowners.
Dr Truong said the transformation began more than 18 months ago.
Delivering these consistent results is a testament to the foundational strength we are building within our company. Our commitment to Zero Harm and our focus on global manufacturing efficiency has allowed us to consistently provide a high level of service to our customers and deliver quality products to the markets in which we operate around the world.
This transformation, which is driven by a continuous improvement mindset, has enabled our ability to deliver consistently improving financial results.
James Hardie share price summary
The James Hardie share price has been on an upward trend since the market meltdown in March. The world's number 1 producer of fibre cement saw its share price fall to a low of $12.54 in March and jump almost 200% to today's price.
