According to the National Association of Home Builders (NAHB), sales of newly built, single-family homes increased by 15.6% in January 2013.
Rick Judson, Chairman of NAHB, commented: “The surge in demand for new homes this January is an excellent sign that the housing recovery is gaining steam and helping put more people back to work.”The year 2012 has witnessed a recovery in the US housing market, and there is an indication that the environment will get better going ahead. The cement industry is one of the industries that will benefit from this positive move in the US housing market. One of the attractive players in this segment is James Hardie Industries plc (ADR) (NYSE:JHX). James Hardie Industries plc (ADR) (NYSE:JHX) is one of the largest manufacturers of fibre cement products for interior and exterior building construction applications primarily in the United States, Australia, New Zealand, the Philippines and Europe.
James Hardie Industries plc (ADR) (NYSE:JHX) released its Q3 FY 2013 results on Feb. 27 2013. Net sales in Q3 increased by 13% to $320.4 million from $283.0 million in the same period last year. Gross profit increased by 6% to $96.2 million from $90.6 million in the same period last year.
“Our sales volume increased 17% in the USA and Europe Fibre Cement segment during the quarter, providing further evidence that the housing recovery in the US is gaining momentum. However, EBIT growth continued to be constrained by a lower average net sales price and elevated costs due to ongoing investment in organizational capabilities ahead of a more active market environment,” said James Hardie CEO- Louis Gries.
“Over the next twelve months, sales growth is anticipated to exceed operating cost increases. EBIT to revenue margins are therefore expected to improve,” said Mr. Gries.
Let us also review quarterly results of other two players in the cement industry.
Eagle Materials, Inc. (NYSE:EXP) declared its Q3 FY 2013 results in early February. Revenues increased by 33% to $164.7 million as compared to the same period last year. Operating earnings from cement for Q3 increased by 7% to $16.6 million as compared to same period last year. The company completed its acquisition of Lafarge North America’s cement plants in November 2012.
Texas Industries, Inc. (NYSE:TXI) had reported its Q2 ended Nov. 30, 2012 results at the start of the year. They reported a net loss of $11.1 million for the quarter. According to CEO Mel Brekhus, “Net sales for cement were up 20% compared to the same quarter a year ago and marks the sixth consecutive quarter that net cement sales exceeded the prior year.”