Fletcher Building's profit guidance for this year has disappointed the market. The mid-point is 2 percent below analysts' consensus forecasts.
The company told yesterday's annual shareholders' meeting that operating earnings before significant items this year will be between $650 and $690 million.
The guidance is up from the $624 million in operating earnings before significant items the building products company reported for the year ended June.
However, the mid-point was about 2 percent below analysts' consensus forecasts.
Craigs Investment Partners said it thinks the key reason was a slower-than-hoped Australian recovery.
Craigs says Fletcher's earnings from housing and infrastructure come late in the economic cycle.
That means the Australian recovery will be more pronounced from the year ending June 2016.
Analyst at Forsyth Barr, Andy Bowley, said the comments at the meeting will dampen the market's overly optimistic outlook for Fletcher's earnings.
Mr Bowley said although Australia will act as a headwind through to the end of this year, the New Zealand trading backdrop looks a picture of health.
End of era
Meanwhile it is the end of an era and the start of a new one for Fletcher Building.
Shareholders farewelled retiring chair Ralph Waters and welcomed Sir Ralph Norris to lead the board at the company's annual meeting in Auckland yesterday.