Exchange: OTC | Sector: Basic Materials | Industry: Construction Materials
Q2 2025
Published: Sep 30, 2024
Earnings Highlights
Revenue of $960.80M down 3.8% year-over-year
EPS of $0.19 decreased by 44.1% from previous year
Gross margin of 38.8%
Net income of 83.40M
"No transcript quotes available in the provided data." -
James Hardie Industries plc (JHIUF) QQ2 2025 Results: Resilient Free Cash Flow Amid Revenue Contraction in a Cyclic Construction Materials Market
Executive Summary
James Hardie Industries reported QQ2 2025 (fiscal year 2025) results that highlighted protracted but manageable revenue softness against a backdrop of durable cash generation. Revenue declined 3.8% year-over-year to USD 960.8 million and fell 3.0% quarter-over-quarter, underscoring continued cyclicality in construction activity. Despite top-line pressures, the company delivered solid profitability with gross margin of 38.8% and an operating margin of 15.9%, aided by disciplined cost management and a favorable mix of high-margin fiber cement products. Net income of USD 83.4 million produced diluted earnings per share of USD 0.19, translating to an 8.7% net profit margin. Management’s ability to convert operating performance into free cash flow remained a standout feature, with cash generated from operations of USD 179.2 million and free cash flow of USD 83.8 million, supporting a strong liquidity position and a cash-end balance of USD 385.8 million.
The balance sheet remains solid, with total assets of USD 4.97 billion and total liabilities of USD 2.997 billion. The company carries net debt of USD 853.4 million, supported by ample liquidity (cash and equivalents of USD 368.1 million). Interest coverage remains robust (approx. 80x given low interest expense), and leverage metrics show a long-term debt load that is manageable within the current cash flow framework. The quarterly performance reflects a mature, highly cash-generative business with limited dividend payout activity in QQ2 2025, leaving room for potential deleveraging or capital allocation options contingent on demand stability and market pricing dynamics.
Looking ahead, the company did not provide formal quantitative guidance in the disclosed materials. In our view, earnings resilience will hinge on a stabilization or acceleration in construction demand, favorable pricing/mix for high-margin fiber cement products, and continued productivity gains. Key factors for investors to monitor include housing market momentum in the United States, demand development in Asia Pacific, input cost trajectories, and the company’s ability to convert continued cash flow into deleveraging, buybacks, or strategic capex.
Key Performance Indicators
Revenue
960.80M
QoQ: -3.04% | YoY:-3.80%
Gross Profit
372.90M
38.81% margin
QoQ: -5.96% | YoY:-7.61%
Operating Income
152.30M
QoQ: -35.30% | YoY:-31.83%
Net Income
83.40M
QoQ: -46.30% | YoY:-45.02%
EPS
0.19
QoQ: -47.22% | YoY:-44.12%
Revenue Trend
Margin Analysis
Key Insights
Revenue: USD 960.8m, YoY -3.80%, QoQ -3.04% (QoQ and YoY declines reflect cyclicality in construction markets and product mix).
- Revenue: USD 960.8m, YoY -3.80%, QoQ -3.04% (QoQ and YoY declines reflect cyclicality in construction markets and product mix).
- Gross Profit: USD 372.9m, Gross Margin: 38.81%
- Operating Income: USD 152.3m, Operating Margin: 15.85%
- EBITDA: USD 204.2m, EBITDA Margin: 21.25%
- Net Income: USD 83.4m, Net Margin: 8.68%
- Earnings per Share (EPS): USD 0.19, Diluted EPS: USD 0.19
- Operating Cash Flow: USD 179.2m; Capital Expenditures: USD -95.4m; Free Cash Flow: USD 83.8m
- Balance Sheet: Total Assets USD 4.973b; Total Liabilities USD 2.997b; Total Equity USD 1.977b; Cash and Cash Equivalents USD 368.1m; Net Debt USD 853.4m; Long-Term Debt USD 1.193b
- Leverage and Coverage: Long-Term Debt to Capitalization 0.363, Total Debt to Capitalization 0.382, Interest Coverage ~80x, P/BV 7.19, P/E 42.62, EV/EBITDA 73.80
- Liquidity: Cash at period end USD 385.8m; Net cash provided by operating activities USD 179.2m; Cash Conversion Cycle illustrates mid-cycle working capital dynamics; Dividend payout ratio 0 (no cash dividend in QQ2 2025).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
960.80M
-3.80%
-3.04%
Gross Profit
372.90M
-7.61%
-5.96%
Operating Income
152.30M
-31.83%
-35.30%
Net Income
83.40M
-45.02%
-46.30%
EPS
0.19
-44.12%
-47.22%
Key Financial Ratios
currentRatio
2.02
grossProfitMargin
38.8%
operatingProfitMargin
15.9%
netProfitMargin
8.68%
returnOnAssets
1.68%
returnOnEquity
4.22%
debtEquityRatio
0.62
operatingCashFlowPerShare
$0.42
freeCashFlowPerShare
$0.2
priceToBookRatio
7.19
priceEarningsRatio
42.62
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript dataset for QQ2 2025 is not provided in the input. Consequently, there are no management quotes or call themes to extract. If a transcript becomes available, we would extract themes by: strategy (growth/portfolio focus, pricing discipline), operations (cost controls, productivity gains), market conditions (demand trajectory, pricing environment), and capital deployment (deleveraging vs. buybacks vs. capex).
No transcript quotes available in the provided data.
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No transcript quotes available in the provided data.
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Forward Guidance
No formal forward guidance was published for QQ2 2025 in the supplied materials. In the near term, the trajectory will be driven by: (1) housing/macro demand stabilization in key geographies (US, Australia, Europe), (2) pricing power and product mix for high-margin fiber cement products, and (3) ongoing productivity improvements and supply chain resilience. Our assessment suggests a cautious path to improvement unless housing demand recovers; downside risk includes further declines in new residential construction activity and potential input cost pressure. Investors should monitor: housing starts and new product adjacencies, geographic mix shifts toward higher-margin markets, commodity cost trends (cement, fiber inputs), and the company’s capital allocation decisions (debt reduction versus share repurchases).
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
JHIUF Focus
38.81%
15.90%
4.22%
42.62%
CPAC
35.30%
18.00%
2.88%
13.08%
SUM
23.60%
16.10%
2.45%
15.15%
EXP
32.70%
29.80%
10.00%
16.75%
CRH
38.10%
18.90%
6.26%
9.64%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
James Hardie demonstrates solid cash generation and balance-sheet resilience, underscoring its status as a cash-flow positive, high-margin player in the fiber cement construction materials niche. The QQ2 2025 results show a modest revenue downshift against a backdrop of stable margins and robust cash conversion. However, a high valuation multiple (P/BV ~7.19, P/E ~42.6, EV/EBITDA ~73.8) and the absence of formal near-term guidance introduce uncertainty around multiple expansion and the path to sustainable growth. The investment thesis rests on stabilizing or modestly improving construction demand, continued price/mix discipline, and productive use of free cash flow—whether via deleveraging, buybacks, or targeted capex that reinforces a durable competitive position. In the near term, investors should monitor housing activity trends, geographic mix shifts, input cost trajectories, and management’s capital allocation decisions. If demand stabilizes and efficiency gains materialize, the company could sustain earnings power and cash flow generation, supporting a more constructive long-term view despite the current cyclical headwinds.
Key Investment Factors
Growth Potential
Growth potential centers on strengthening market penetration of North America and Asia Pacific fiber cement products, improving price/mix discipline, and leveraging productivity gains to support mid-single-digit margin expansion as volumes stabilize.
Profitability Risk
Key risks include cyclicality in construction markets, input cost volatility, currency exposures, competitive pressure from broader building products peers, and the potential need to sustain capex for capacity or modernization. Additionally, no dividend was paid in QQ2 2025, which may influence total return expectations.
Financial Position
Solid liquidity with USD 385.8m cash, net debt USD 853.4m, and ample operating cash flow (USD 179.2m). Leverage is moderate with Total Debt to Capitalization at 0.382 and long-term debt at USD 1.193b. Interest coverage remains robust, implying comfortable debt service capacity given current profitability.
SWOT Analysis
Strengths
Healthy gross margin (~38.8%) and EBITDA margin (~21.25%) in QQ2 2025
James Hardie Industries plc (JHX) QQ2 2025 Results — North America Outperformance Amid Raw Material Headwinds; Margin Resilience Drives cash Flow an...