Building products group James Hardie Industries SE (JHX.AU) on Thursday posted a first quarter net profit of US$104.9 million, swinging from a US$77.9 million loss a year before, as a weaker Australian dollar created a favorable asbestos liability adjustment.

But net operating profit, excluding asbestos liabilities and other expenses, fell 3% to US$40.5 million from US$41.6 million as U.S. housing markets remained subdued.

"The recovery in the U.S. residential housing market remains disappointing and fragile," Chief Executive Louis Gries said.

He said a gradual recovery in U.S. residential construction, apparent in the first four months of calendar 2010, stalled after the expiry of government tax credit incentives, with conditions expected to remain at or close to the market bottom found in recent months.

James Hardie forecast an annual net operating profit, excluding asbestos liabilities and other expenses, for the year to March 31, 2011, of between US$110 million and US$125 million, which it said is below the current range of analysts' forecasts of between US$143 million and US$164 million.

The company's asbestos liabilities relate to compensation payments to workers and customers suffering diseases caught from discontinued products.

James Hardie, the largest maker of housing siding in the U.S., said sales for the three months to June 30 were US$318.4 million, a 12% rise on the US$284.5 million posted in the first quarter of last year.

The Australian-listed company, which completed a domicile move from the Netherlands to Ireland in June, said earnings before interest and tax rose to US$127.0 million, compared with a loss of US$57.1 million previously.

The company hadn't provided guidance for the quarter. Analysts said before the result that earnings would likely be hit by lower-than-expected U.S. housing activity and rising raw materials costs, particularly for pulp.

 
   -By Ross Kelly, Dow Jones Newswires; 61-2-9827-4692; ross.kelly@dowjones.com
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