However, its half-year after-tax profit was down 27% to $172 million, which was in line with expectations.
Crucially for investors, Fletcher maintained its half-year dividend payout at 24c per share at a time when dividend payouts are expected to come under pressure, with companies seeking to retain more cash on their balance sheets as the recession tightens.
Its share price held steady at around $5.45 on opening yesterday, rising to a high of $5.70 before retracing some of those gains.
Fletcher has also confirmed the cutting of 1100 jobs worldwide as a cost-cutting measure.
Overall group sales were up 6% to $3.7 billion.
Fletcher's after-tax profit of $172 million compared with $235 million at the same time last year, while earnings before interest and tax fell to $303 million from last year's $394 million.
However, its steel division saw strong earnings gains, up 100% to $95 million.
ABN Amro Craigs broker Peter McIntyre said weakening conditions in Europe and the recession-driven downturn in the United States, United Kingdom, New Zealand and Spain contributed to the lower result.
He noted Fletcher, the third-largest company on the NZX, had narrowed its full-year after-tax profit range to between $289 million and $336 million, and he was forecasting it would come in at the lower end of the range.
"Management remain comfortable with that range, albeit they now expect earnings to come in towards the bottom end," Mr McIntyre said, and then reiterated Fletcher management's position that "this assumes that there is no significant further deterioration in trading conditions".
Forsyth Barr broker Peter Young said it was a good result, aided by the steel business earnings increase.
"[However,] we will review full-year 2010 forecasts, probably lower, to reflect the current conditions but will maintain the stance that trading conditions for 2010 will be generally better and higher than 2009," he said.
Both Mr Young and Mr McIntyre noted Fletcher had said the maintenance of the second-half dividend was dependent on the company's overall performance during the second half of the year.
"I would be cautioning that the dividend will be cut," Mr McIntyre said, noting the last quarter of 2008 was "extremely difficult" for Fletchers, with the likelihood of similar tough times later this year.
Mr Young said the laminates and panels division earnings before interest and tax (ebit) came in lower after incurring a further $12 million in one-off costs ($9 million for laminex and $3 million for Formica).
"Even adding this back to the first half of 2009, operating ebit of $51 million was lower than our forecast of $65 million, of $53 million for Laminex and $12 million for Formica."
