The brokers' forecasts result carries a caution for Fletcher later in the year, as timeframes for rebuilding work in Christchurch appear set to be drawn out longer than anticipated, which could dampen or draw out revenue.
On other fronts, Fletcher appears set to clinch a hostile $A800 million ($NZ1.05 billion) takeover bid for Australian rival Crane Group, after Crane's board recommended shareholders accept a second, revised, Fletcher bid for $A10.07 per share, comprised of Fletcher scrip and cash.
Last Friday, Fletcher, which began its Crane takeover already owning about 15% of the company and now stands at 18.8%, gained clearance for the acquisition from the Australian Competition and Consumer Commission.
Forsyth Barr broker Tony Conroy said he expected the continuation of margin improvements for Fletcher from the second half of 2010 to flow through to first-half trading during 2011; but "on relatively subdued revenue growth of only 3%", Mr Conroy said.
He is forecasting Fletcher's after-tax profit for the six months will increase about 20%, from $154 million a year ago to $185 million, boosting the interim dividend 2c to 16c.
"We remain nervous the general market conditions in both New Zealand and Australia are tracking weaker than anticipated for the second half of this year," Mr Conroy said.
Timing of the Christchurch rebuilding may have to be pushed out, but this could be offset by increased activity following the Queensland floods, he said.
Craigs Investment Partners broker Peter McIntyre is forecasting after-tax profit will increase about 10% from a year ago to $170 million; boosting the interim dividend from last year's 14c to 15c.
Mr Conroy said, of all Fletcher's worldwide divisions, Laminates and Panels' earnings before interest and tax (ebit) margins were forecast to increase from 6.9% in the first half of 2010 to 9.1% for the first half 2011, steel up from 3.9% to 6.9%, and distribution up from 3.9% to 6.9%.
"[However] The building products division is forecast to have a 13% fall in ebit to $66 million.
"That's because the result a year earlier was substantially boosted by its Australian insulation business, but the Australian Government later withdrew its insulation subsidy," Mr Conroy said.
Both Mr Conroy and Mr McIntyre believed the revised bid for Crane by Fletcher would be successful.
Mr McIntyre said the acquisition would be earnings-accretive, contributing immediately to Fletcher's bottom-line, and the price being offered was not exorbitant.
• Earlier this month, an independent report by Ernst and Young said Fletcher might be included in Australian stock market indices if it succeeded in its Crane takeover, NZPA reported.
The report found Fletcher's raised offer to be fair and reasonable with the implied value of $A10.07 a share within the $A9.92 to $A11.56 range of value assessed in the report.
On the day before the bid, Crane had a market capitalisation of $A607 million and Fletcher Building had a market capitalisation of $A3.6 billion.
Fletcher, while well represented in all major NZX indices, is not included in any major stock indices in Australia, the report said.
