Cement Foundation for Aussie Rally
Construction numbers dropped in July, but earnings are helping Australia’s largest cement company shoot ahead.
Before the bell this morning, James Hardie (JHX) announced an adjusted fiscal first-quarter net operating profit of $41.6 million, a 4% improvement over the same period last year. The exchange rate between Australian and US dollar weighed on the company’s asbestos-related adjustments, which combined with other expenses dragged the company’s overall net figures into the red by -$77.9 million. Investors are pleased with the results, sending shares higher by 20%, despite a weaker than expected construction report from the U.S. Commerce Department.
James Hardie is carrying the Cement Stocks Index higher today. As a whole, the sector is up by 9.1%, as all five components advance.
Though James Hardie is the biggest winner in the Australia Stocks and ADRs Index, some Down-Under banks are showing impressive gains as well. National Australia Bank (OTC: NABZY) and Australia & New Zealand Banking Group (OTC: ANZBY) are both up by more than 3% as the Australian dollar rebounds from near two-week lows.
National Australia Bank recently took a bold step into the consumer lending business with the acquisition of Challenger Financial Services Group’s mortgage business for $316 million.
Australian largest U.S. listed companies, communications play Telstra (OTC: TLSYY) and diversified natural resources company BHP Billiton (BHP) are also ahead in the rally.
As of this writing, the Australia Stocks and ADRs Index is the top performing tickerspy International Index over the last week, up by 4%.
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