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Armstrong World (AWI) Q1 Earnings & Net Sales Top, '24 View Up
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Armstrong World Industries, Inc. (AWI - Free Report) reported splendid results for first-quarter 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.
The company’s growth trend was backed by solid contributions from the Mineral Fiber as well as Architectural Specialties segments. The growth was attributable to the increase in average unit value (AUV), driven by favorable pricing and mix. Also, contributions from recent acquisitions aided the uptrend. This was reflected in record-setting sales and adjusted EBITDA growth along with adjusted EBITDA margin expansion.
Furthermore, the company is optimistic about its recently announced acquisition of 3form, LLC, which is expected to expand the portfolio of its Architectural Specialties segment and enhance its relationships with architects and designers. Thanks to its consistent operational excellence and the improving business trend, Armstrong World updated its 2024 outlook despite an uncertain economic backdrop.
Following the results, shares of this international designer and manufacturer of wall and ceiling building materials dwindled 3.3% during the trading hours on Apr 30.
Inside the Headlines
Armstrong World reported adjusted earnings of $1.38 per share, which topped the Zacks Consensus Estimate of $1.21 by 14.1%. The metric also grew 23.2% year over year from earnings of $1.12 per share.
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $326.3 million also surpassed the consensus mark of $317.8 million by 2.7% and grew 5.2% year over year. The upside was driven by a favorable AUV of $20 million partially offset by a lower sales volume of $4 million.
During the quarter, Armstrong World’s operating income of $86.1 million grew 22.6% from the year-ago quarter’s level of $70.2 million, primarily driven by a benefit from favorable AUV, an increase in equity earnings from the Worthington Armstrong Joint Venture and severance costs recorded in the year-ago period. The reported value can be compared with our model’s projection of $77.4 million, or a 10.2% year-over-year increase. Operating margin expanded 380 basis points (bps) from the year-ago quarter to 26.4%. We expected the metric to be 24.7% compared with 22.6% reported in the prior year.
Adjusted EBITDA increased 16% from the year-ago quarter’s figure to $111 million. Adjusted EBITDA margin rose 300 bps from the year-ago quarter to 33.9%. Our estimate for adjusted EBITDA and adjusted EBITDA margin was $100.8 million and 32.1%, respectively.
Segmental Performance
Mineral Fiber: The segment’s net sales grew 4.9% on a year-over-year basis to $239.6 million on the back of $19 million of favorable AUV, partially offset by $8 million of lower sales volumes. For this segment, we expected the quarterly net sales to be $225.7 million.
The segment reported an operating income of $79.2 million, up 24.1% from $63.8 million reported in the year-ago quarter. Operating margin expanded 520 bps from the year-ago quarter’s levels to 33.1%. Adjusted EBITDA increased 17.6% from the year-ago quarter’s figure to $99 million. Adjusted EBITDA margin also rose 450 bps during the quarter to 41.2%.
Architectural Specialties: Net sales in the segment increased 6% year over year to $86.7 million, driven primarily by contributions from recent acquisitions and increased custom metal project sales. Our estimate for this segment’s net sales was $88.2 million.
The segment reported an operating income of $7.7 million, portraying a 6.9% year-over-year decline. Adjusted EBITDA for the quarter was $12 million, indicating a flat growth rate year over year. On a year-over-year basis, the operating margin expanded 10 bps while the adjusted EBITDA margin contracted 20 bps.
Financials
As of Mar 31, 2024, Armstrong World had cash and cash equivalents of $69.6 million compared with $70.8 million in 2023 end. Net cash provided by operations was $26.4 million compared with $26.2 million in the year-ago period.
Adjusted free cash flow was $43 million, up from $30 million reported in the year-ago quarter.
During the reported quarter, the company repurchased 0.1 million shares of common stock for $15 million, excluding commissions and taxes. As of Mar 31, 2024, $702 million shares were remaining under the current authorized share repurchase program.
Updated 2024 Guidance
The company maintains a positive outlook on its growth strategy and cash flow generation for the year, backed by solid first-quarter results and strong execution at the plants, operational efficiencies and cost-saving initiatives.
Armstrong World now anticipates net sales to be within $1,395-$1,435 million (priorly expected $1,335-$1,375 million), indicating an 8-11% increase from the year-ago figure of $1,295 million.
Adjusted EBITDA is now projected to be between $465 million and $485 million, up from the previously expected range of $450-$470 million, suggesting a rise of 8-13% year over year from the reported figure of $430 million.
The company currently expects its adjusted earnings per share to be between $5.80 and $6.05 (priorly expected between $5.60 and $5.90), suggesting growth of 9-14% from the 2023 reported figure of $5.32.
Adjusted free cash flow is now anticipated to be between $285 million and $300 million (previously expected between $275 million and $290 million), indicating an 8-14% increase year over year.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed results for the first quarter of 2024. Earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased on a year-over-year basis.
The quarterly results reflect soft contributions from the Building Materials and Magnesia Specialties segments due to lower shipments. Going forward, MLM anticipates record federal-level and state-level infrastructure investments, large-scale heavy industrial activity, data centers and energy projects to offset softer residential and warehouse construction demand, as well as anticipated moderation in light non-residential activity.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence. Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing, and network & communications.
Despite challenges in the operating environment, the company demonstrated resilience and adaptability. A significant year-over-year increase in EME’s remaining performance obligations and a healthy project pipeline provided it with strong visibility into the rest of the year and helped it increase guidance for 2024.
Weyerhaeuser Company (WY - Free Report) reported mixed results for first-quarter 2024. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West, a decrease in domestic sales volumes as well as sales realizations accompanied by increased lumber manufacturing and raw materials costs. Also, export sales volumes were softer, especially in China. Nonetheless, the company is optimistic about signing the third carbon capture and sequestration agreement in the U.S. South and is encouraged by the improving fundamentals for housing and repair and remodel demand.
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Armstrong World (AWI) Q1 Earnings & Net Sales Top, '24 View Up
Armstrong World Industries, Inc. (AWI - Free Report) reported splendid results for first-quarter 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.
The company’s growth trend was backed by solid contributions from the Mineral Fiber as well as Architectural Specialties segments. The growth was attributable to the increase in average unit value (AUV), driven by favorable pricing and mix. Also, contributions from recent acquisitions aided the uptrend. This was reflected in record-setting sales and adjusted EBITDA growth along with adjusted EBITDA margin expansion.
Furthermore, the company is optimistic about its recently announced acquisition of 3form, LLC, which is expected to expand the portfolio of its Architectural Specialties segment and enhance its relationships with architects and designers. Thanks to its consistent operational excellence and the improving business trend, Armstrong World updated its 2024 outlook despite an uncertain economic backdrop.
Following the results, shares of this international designer and manufacturer of wall and ceiling building materials dwindled 3.3% during the trading hours on Apr 30.
Inside the Headlines
Armstrong World reported adjusted earnings of $1.38 per share, which topped the Zacks Consensus Estimate of $1.21 by 14.1%. The metric also grew 23.2% year over year from earnings of $1.12 per share.
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise
Armstrong World Industries, Inc. price-consensus-eps-surprise-chart | Armstrong World Industries, Inc. Quote
Net sales of $326.3 million also surpassed the consensus mark of $317.8 million by 2.7% and grew 5.2% year over year. The upside was driven by a favorable AUV of $20 million partially offset by a lower sales volume of $4 million.
During the quarter, Armstrong World’s operating income of $86.1 million grew 22.6% from the year-ago quarter’s level of $70.2 million, primarily driven by a benefit from favorable AUV, an increase in equity earnings from the Worthington Armstrong Joint Venture and severance costs recorded in the year-ago period. The reported value can be compared with our model’s projection of $77.4 million, or a 10.2% year-over-year increase. Operating margin expanded 380 basis points (bps) from the year-ago quarter to 26.4%. We expected the metric to be 24.7% compared with 22.6% reported in the prior year.
Adjusted EBITDA increased 16% from the year-ago quarter’s figure to $111 million. Adjusted EBITDA margin rose 300 bps from the year-ago quarter to 33.9%. Our estimate for adjusted EBITDA and adjusted EBITDA margin was $100.8 million and 32.1%, respectively.
Segmental Performance
Mineral Fiber: The segment’s net sales grew 4.9% on a year-over-year basis to $239.6 million on the back of $19 million of favorable AUV, partially offset by $8 million of lower sales volumes. For this segment, we expected the quarterly net sales to be $225.7 million.
The segment reported an operating income of $79.2 million, up 24.1% from $63.8 million reported in the year-ago quarter. Operating margin expanded 520 bps from the year-ago quarter’s levels to 33.1%. Adjusted EBITDA increased 17.6% from the year-ago quarter’s figure to $99 million. Adjusted EBITDA margin also rose 450 bps during the quarter to 41.2%.
Architectural Specialties: Net sales in the segment increased 6% year over year to $86.7 million, driven primarily by contributions from recent acquisitions and increased custom metal project sales. Our estimate for this segment’s net sales was $88.2 million.
The segment reported an operating income of $7.7 million, portraying a 6.9% year-over-year decline. Adjusted EBITDA for the quarter was $12 million, indicating a flat growth rate year over year. On a year-over-year basis, the operating margin expanded 10 bps while the adjusted EBITDA margin contracted 20 bps.
Financials
As of Mar 31, 2024, Armstrong World had cash and cash equivalents of $69.6 million compared with $70.8 million in 2023 end. Net cash provided by operations was $26.4 million compared with $26.2 million in the year-ago period.
Adjusted free cash flow was $43 million, up from $30 million reported in the year-ago quarter.
During the reported quarter, the company repurchased 0.1 million shares of common stock for $15 million, excluding commissions and taxes. As of Mar 31, 2024, $702 million shares were remaining under the current authorized share repurchase program.
Updated 2024 Guidance
The company maintains a positive outlook on its growth strategy and cash flow generation for the year, backed by solid first-quarter results and strong execution at the plants, operational efficiencies and cost-saving initiatives.
Armstrong World now anticipates net sales to be within $1,395-$1,435 million (priorly expected $1,335-$1,375 million), indicating an 8-11% increase from the year-ago figure of $1,295 million.
Adjusted EBITDA is now projected to be between $465 million and $485 million, up from the previously expected range of $450-$470 million, suggesting a rise of 8-13% year over year from the reported figure of $430 million.
The company currently expects its adjusted earnings per share to be between $5.80 and $6.05 (priorly expected between $5.60 and $5.90), suggesting growth of 9-14% from the 2023 reported figure of $5.32.
Adjusted free cash flow is now anticipated to be between $285 million and $300 million (previously expected between $275 million and $290 million), indicating an 8-14% increase year over year.
Zacks Rank & Recent Construction Releases
Armstrong World currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed results for the first quarter of 2024. Earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased on a year-over-year basis.
The quarterly results reflect soft contributions from the Building Materials and Magnesia Specialties segments due to lower shipments. Going forward, MLM anticipates record federal-level and state-level infrastructure investments, large-scale heavy industrial activity, data centers and energy projects to offset softer residential and warehouse construction demand, as well as anticipated moderation in light non-residential activity.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence. Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing, and network & communications.
Despite challenges in the operating environment, the company demonstrated resilience and adaptability. A significant year-over-year increase in EME’s remaining performance obligations and a healthy project pipeline provided it with strong visibility into the rest of the year and helped it increase guidance for 2024.
Weyerhaeuser Company (WY - Free Report) reported mixed results for first-quarter 2024. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West, a decrease in domestic sales volumes as well as sales realizations accompanied by increased lumber manufacturing and raw materials costs. Also, export sales volumes were softer, especially in China. Nonetheless, the company is optimistic about signing the third carbon capture and sequestration agreement in the U.S. South and is encouraged by the improving fundamentals for housing and repair and remodel demand.