James Hardie Industries (NYSE:JHX) shares tumbled more than 35% on Wednesday, marking their steepest one-day drop since 1973, after the building materials company posted weaker-than-expected quarterly results and sharply cut its outlook for the year.
The maker of fiber cement siding and other home construction products reported fiscal first quarter net income of $62.6 million, or $0.15 per share, down from $155.3 million, or $0.36 per share, a year earlier.
Adjusted net income fell 29% to $126.9 million, missing analyst forecasts.
Net sales declined 9% to $899.9 million, with North America, its largest market, recording a 12% sales drop amid softer demand and affordability concerns in single-family housing.
Operating income fell 41% year over year to $138.6 million, while adjusted EBITDA dropped 21% to $225.5 million.
Margins contracted across key regions, particularly in North America, where the company cited weaker volumes, unfavorable production costs, and rising raw material expenses.
James Hardie issued significantly reduced guidance for fiscal 2026, projecting adjusted EBITDA between $1.05 billion and $1.15 billion, about 24% below its prior range.
The company also cut its full-year earnings outlook, with earnings per share expected to come in more than 40% below consensus estimates.
It pointed to persistent weakness in the US housing market, especially in states such as Texas, Florida, and Georgia, where affordability challenges and elevated inventory are curbing demand.
Homeowners are delaying major renovation and construction projects due to economic uncertainty, the company said.
"Our first quarter results were largely as we had anticipated, and reflect an expected normalization of channel inventories, due to moderating growth expectations by customers as uncertainty built throughout April and early May,” James Hardie CEO Aaron Erter said in a statement.
“We remain committed to outperforming market demand over the long term and are employing strategies to deliver on this commitment, notwithstanding near-term conditions.”