Updated 12pm: Shares in Fletcher Building have fallen more than 10% on this morning's news of a profit downgrade from the country's largest listed company.
At midday, Fletcher Building shares were trading down 85c at $7.05 each. Over 3 million shares, with a combined value of $22.3 million have traded hands. The company has a market capitalisation of $4.8 billion.
Fletcher Building has cut its earnings forecasts for the first half of the year due to weak construction activity and delays to the Canterbury rebuild.
The building and construction company said it now expects earnings of $149.4 million compared to $166 million net earnings for the prior year, a 10% fall.
However, for the full 2012 financial year, including Crane contributions, net earnings are expected to be similar to the $359 million pre-unusuals result reported in 2011.
Fletcher said no material improvement in trading conditions in New Zealand can be expected in the first half of the 2012 financial year, and the timing of a sustained and meaningful recovery beyond that is uncertain.
“In Australia, there is a clear risk that residential and commercial construction activity will remain around the current low level for the balance of the 2012 financial year.”
Markets in North America and Europe are expected to remain flat while Asia is expected to continue growth, Fletcher said in its statement.
Meanwhile, the company had expected the pace of reconstruction efforts in Canterbury to accelerate in the second half of the 2012 financial year, assuming a continuing reduction in seismic activity.
However, a 5.5 magnitude earthquake on Sunday is expected to further delay rebuilding efforts.
“New Zealand Treasury expectations are that the rebuilding in Canterbury will not “begin in earnest” until the second half of the 2012 calendar year.”
Fletcher shares closed yesterday at $7.90.