Fletcher Building, the biggest company on the NZX 50 Index, posted a one percent gain in first-half profit as home building and Canterbury reconstruction in New Zealand made up for declining Australian earnings.
The stock fell on the results.
Profit rose to $146 million in the six months ended December 31, from $144 million a year earlier, the Auckland-based company said in a statement.
Sales rose three percent to $4.38 billion.
Fletcher reiterated the guidance given at its annual meeting for full-year profit of $560m-$610m.
It sees no improvement in Australian trading in the second half while all of its New Zealand businesses should show gains, underpinned by increased home building, infrastructure projects and continued strong reconstruction activity in Canterbury.
"The pace of new residential construction in New Zealand has improved substantially over the past six months in both Canterbury and Auckland," chief executive Mark Adamson said.
"By contrast, in Australia, weak market conditions have continued in the residential and commercial construction sectors."
The biggest deterioration came from Crane Group, the Australian pipe manufacturer and distribution company acquired in early 2011.
Fletcher shares fell 3.3 percent to $9.01, having gained almost 40 percent in the past year.
"Overall it probably just met or was a smidgen below expectations," said Matthew Goodson, portfolio manager at BT Funds Management. "New Zealand looks solid, Australia weak. The Crane acquisition is rather disappointing thus far."
Mr Adamson said in Australia earnings fell by 12 percent while in New Zealand, rising residential building activity, especially in Auckland and Christchurch, lifted local earnings by 31 percent.
Sales fell about 15 percent to $1.1 billion, still the biggest Fletcher business by revenue, while reported earnings dropped 26 percent to $39 million.
Operating earnings from Crane's pipeline business rose seven percent to $31 million while at the distribution business, earnings tumbled 59 percent to $9 million, reflecting the weak Australian residential housing market.
By contrast, Fletcher's construction business showed the strongest gains during the first half, with sales rising 18 percent to $613 million and earnings jumping 48 percent to $37 million, due to rising home sales and more recovery work in Canterbury.