Building materials company Boral has upgraded its profit forecast, a week after announcing major job cuts.
Boral says it expects to report an after tax net profit of $52 million for the six months to December, up from the previous estimate of $35 million.
The company says better-than-expected demand for construction materials in Australia has boosted profits, along with the early benefits of the restructure announced last week.
More than two thousand jobs are being cut by Boral globally, with 700 of the positions in Australia.
The company's new chief Mike Kane said at the time the cuts were necessary because of tough conditions in the construction market, especially Australia.
Nomura analyst Simon Thackray says it is surprising that Boral did not give its updated profit guidance at the same time as the announcement about job cuts.
"It's a little surprising that that sort of qantum, that sort of a material amount, was not known last week when they made the cost out," he said.
"But clearly the message that he is giving to shareholders is that he's serious about improving the cost structure of the business and without impacting the operating leverage." Boral says favourable dry weather conditions have resulted in less construction delays and therefore more demand for building materials.
Boral shares had fallen 0.3 per cent despite the profit upgrade, and Mr Thackray says that is because this is likely to be a one-off improvement to the bottom line.
"I think it's a matter of some clear skies, I think that's pretty accurate that description," he said.
"Really the market looks forward and not backward, and what I would remind everybody of is the fact that building materials, construction materials, companies are order takers and not order makers." The company will release its final audited results on February 13.