The shares of the country's largest listed company were punished. More than 5 million were traded by early yesterday afternoon, down more than 4%, or 29c at $6.37; closing for the day at $6.32, down 5.1%.
Analysts' consensus was Fletcher's after-tax profit would be $315 million. The company had recently reiterated guidance between $310 million and $340 million.
Yesterday, it delivered after-tax earnings at $317 million, before restructuring and impairment charges, which was 12% down on last year's result, its full-year-to-June report said yesterday.
After restructuring and impairment costs of $132 million were booked, net profit was $185 million - almost 35% down from last year's $283 million.
Cash flow was up 11% at $448 million, from Formica, pipe-maker Crane, Construction and Steel divisions, with total revenue for the year up 20% from $7.41 billion to $8.87 billion.
A 17c dividend yesterday took the full-year dividend to 34c.
Fletcher's chief executive Jonathan Ling said the result was driven by low volumes in the group's core markets of New Zealand and Australia.
"Weak building activity in New Zealand, coupled with a marked slowdown in residential and commercial construction in Australia, resulted in lower earnings being achieved compared to last year," Mr Ling said.
Craigs Investment Partners broker Peter McIntyre said it was a "mixed result" for Fletcher, given the difference in divisional performance.
Of the seven divisions, only Crane and Concrete were up in revenue and also reported earnings. Building Products, Construction, Distribution, Laminates and Panels and Steel were all down.
Mr McIntyre said for the past five years Fletcher had been a "market darling", providing outperforming results for investors, "but that is now clearly in reversal".
"Fletcher have given no guidance or clear vision on outlook and what they describe as a difficult market to trade in," he said.
Included in the underlying results was $NZ40 million in property sales which was the key difference between Craigs' forecast, and the reported results, Mr McIntyre said.
The $132 million restructuring and impairment charges were higher than expected, Mr McIntyre said, with Laminex restructuring at $38 million, closing a Spanish Formica plant at $20 million and asset value adjustment of insulation at $74 million.
Chief executive in-waiting, Mark Adamson, said he would extend the company's strategic business review, focusing on long-run steel, as it tried to drive down costs in the face of a tepid trading outlook, BusinessDesk reported.
Long-run steel was headed for change after earnings tumbled 58% to $5 million, in spite of volumes being up 3%.
Mr Adamson would not rule out "small divestments of non-core assets" but would wait until he took over from Mr Ling.
In Christchurch as lead contractor, Fletcher has been dogged by a slower-than-expected start to the Christchurch rebuilding, although almost $1 billion has been paid to contractors during the past nine months.
Australia has seen a softening in construction conditions, alongside the unexpected but rapid loss of momentum in its mining sector.
Mr Ling said during the past year in New Zealand, Fletcher had continued to experience very low levels of new house building.
"Coupled with the ongoing disruption to rebuilding in Canterbury from further earthquakes, weak commercial construction activity, and a slowdown in infrastructure spending, we've endured a very tough year in our New Zealand businesses," he said.
Mr Ling said he was "very pleased" with the Crane division, acquired in March 2011, which delivered operating earnings of $106 million in its first full year of ownership, despite weakness in the Australian residential market.
On the $74 million asset value write-down off insulation, Mr Ling said it was decided after a review to retain the business. The review outcome highlighted " that medium-term earnings prospects have deteriorated".
" This has necessitated a reduction in the carrying value of the business through a write-down of goodwill, a write-off of stock, and a reduction in the value of its brands, totalling $74 million after tax," he said.
