Shares of James Hardie Industries (JHX.AU) plummeted 5.07% in Wednesday's trading session following the release of its fiscal year 2025 financial results. The world's largest fibre cement maker reported a 9% drop in annual profit, primarily due to weaker performance in its Asia Pacific segment and a modest decline in North American sales.

The Dublin-based company posted an annual adjusted net income of $644.3 million, down from $707.5 million a year ago. While this figure slightly exceeded the company's own forecast of at least $635 million and beat analysts' expectations, investors seemed to focus on the underlying challenges facing the business. The Asia Pacific fibre cement sales plunged 7% for the year, hit by lower volumes mainly due to the shutdown of manufacturing and commercial operations in the Philippines. Additionally, the North America segment, which accounts for about three-quarters of James Hardie's net sales, experienced a 1% decline in sales as a 3% drop in volumes outweighed gains from annual price increases.

Looking ahead, James Hardie provided a cautious outlook for fiscal year 2026. The company projected a decline in market volumes for its North American segment but expects net sales to grow modestly in the low single digits. It also anticipates total adjusted EBITDA growth to be up by low single digits next year. However, the company warned that "more recent, broader macroeconomic uncertainty could further impact the cost of home construction and weigh on consumer sentiment, influencing demand." This conservative guidance, coupled with the weaker-than-expected performance in key markets, likely contributed to the sharp sell-off in the stock.