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Armstrong World (AWI) Q1 Earnings & Sales Miss Estimates
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Armstrong World Industries, Inc.’s (AWI - Free Report) posted adjusted earnings of 79 cents per share in first-quarter 2018 compared with 74 cents reported in the prior-year quarter.
Including one-time items, the company reported earnings per share of 76 cents compared with 65 cents recorded in the prior-year quarter.
Operational Update
Net sales increased 3% year over year to $227 million, driven by higher Architectural Specialties volumes and higher Mineral Fiber average unit values ("AUV"). Nevertheless, revenues missed the Zacks Consensus Estimate of $232 million.
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise
Cost of sales climbed 10.6% year over year to $156.5 million. Gross profit declined 9.6% to $70.8 million in the reported quarter. Selling, general and administrative (SG&A) expenses dipped 4.6% year over year to $37.5 million.
Adjusted operating income decreased 14.6% year over year to $33 million due to higher depreciation, and elevated manufacturing and input costs. However, these factors were offset by positive AUV, volume growth in Architectural Specialties and SG&A savings. Adjusted EBITDA improved 5% year over year to $79 million, driven by volume growth in Architectural Specialties, solid AUV fall-through to profit, and lower SG&A expenses.
Segment Performance
Mineral Fiber: Net sales at the segment inched up 0.5% year over year to $191 million. Operating income slipped 21% to $43.7 million in the first quarter from $55.5 million reported in the prior-year quarter.
Architectural Specialties: The segment’s sales climbed 22% year over year to $37 million from $30 million witnessed in the year-ago quarter. The segment’s operating profit surged 73% year over year to $8.3 million from the prior-year quarter.
Financials
Armstrong World reported cash and cash equivalents of $127 million at the end of the first quarter compared with $81 million at the end of the prior-year quarter. The company recorded cash flow from operations of $26 million in the reported quarter compared to $11 million recorded in the year-earlier quarter.
Outlook
For 2018, Armstrong World reaffirmed its net sales growth outlook at 5-7%, greater than 10% adjusted EBITDA growth and free cash flow growth of 20-30%. The company raised its EPS guidance to $3.60-$3.82, or 19-27% growth year over year, as a result of $70 million of share repurchases in the first quarter.
Share Price Performance
Over the past year, Armstrong World has outperformed the industry with respect to price performance. The stock has gained around 19%, while the industry recorded growth of 8%.
Zacks Rank & Stocks to Consider
Armstrong World currently has a Zacks Rank #4 (Sell).
Patrick Industries has a long-term earnings growth rate of 11.4%. Its shares have gained 15%, over the past year.
Boise Cascade has a long-term earnings growth rate of 6.7%. The stock has gained 33% in a year’s time.
United Rentals has a long-term earnings growth rate of 18.5%. The company’s shares have rallied 38% during the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Armstrong World (AWI) Q1 Earnings & Sales Miss Estimates
Armstrong World Industries, Inc.’s (AWI - Free Report) posted adjusted earnings of 79 cents per share in first-quarter 2018 compared with 74 cents reported in the prior-year quarter.
Including one-time items, the company reported earnings per share of 76 cents compared with 65 cents recorded in the prior-year quarter.
Operational Update
Net sales increased 3% year over year to $227 million, driven by higher Architectural Specialties volumes and higher Mineral Fiber average unit values ("AUV"). Nevertheless, revenues missed the Zacks Consensus Estimate of $232 million.
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise | Armstrong World Industries, Inc. Quote
Cost of sales climbed 10.6% year over year to $156.5 million. Gross profit declined 9.6% to $70.8 million in the reported quarter. Selling, general and administrative (SG&A) expenses dipped 4.6% year over year to $37.5 million.
Adjusted operating income decreased 14.6% year over year to $33 million due to higher depreciation, and elevated manufacturing and input costs. However, these factors were offset by positive AUV, volume growth in Architectural Specialties and SG&A savings. Adjusted EBITDA improved 5% year over year to $79 million, driven by volume growth in Architectural Specialties, solid AUV fall-through to profit, and lower SG&A expenses.
Segment Performance
Mineral Fiber: Net sales at the segment inched up 0.5% year over year to $191 million. Operating income slipped 21% to $43.7 million in the first quarter from $55.5 million reported in the prior-year quarter.
Architectural Specialties: The segment’s sales climbed 22% year over year to $37 million from $30 million witnessed in the year-ago quarter. The segment’s operating profit surged 73% year over year to $8.3 million from the prior-year quarter.
Financials
Armstrong World reported cash and cash equivalents of $127 million at the end of the first quarter compared with $81 million at the end of the prior-year quarter. The company recorded cash flow from operations of $26 million in the reported quarter compared to $11 million recorded in the year-earlier quarter.
Outlook
For 2018, Armstrong World reaffirmed its net sales growth outlook at 5-7%, greater than 10% adjusted EBITDA growth and free cash flow growth of 20-30%. The company raised its EPS guidance to $3.60-$3.82, or 19-27% growth year over year, as a result of $70 million of share repurchases in the first quarter.
Share Price Performance
Over the past year, Armstrong World has outperformed the industry with respect to price performance. The stock has gained around 19%, while the industry recorded growth of 8%.
Zacks Rank & Stocks to Consider
Armstrong World currently has a Zacks Rank #4 (Sell).
Better-ranked stocks in the same sector include Patrick Industries, Inc. (PATK - Free Report) , Boise Cascade, L.L.C. (BCC - Free Report) and United Rentals, Inc. (URI - Free Report) . While Patrick Industries and Boise Cascade sport a Zacks Rank #1 (Strong Buy), United Rentals carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Patrick Industries has a long-term earnings growth rate of 11.4%. Its shares have gained 15%, over the past year.
Boise Cascade has a long-term earnings growth rate of 6.7%. The stock has gained 33% in a year’s time.
United Rentals has a long-term earnings growth rate of 18.5%. The company’s shares have rallied 38% during the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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