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Armstrong World (AWI) Beats Q4 Earnings, Misses Revenues
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Armstrong World (AWI - Free Report) posted adjusted earnings of 45 cents per share in fourth-quarter 2016, which surged around 56% year over year. However, earnings managed to beat the Zacks Consensus Estimate by a penny.
Operational Update
Net sales remained flat year over year at $298 million. Revenues missed the Zacks Consensus Estimate of $302 million. Cost of sales remained flat year over year at $212 million. Gross profit inched up 1% to $85.7 million in the quarter.
Selling, general and administrative (SG&A) expenses plunged 23% year over year to $60 million. Operating income improved around threefold year over year to $25.7 million.
Armstrong World Industries Inc Price, Consensus and EPS Surprise
Americas: Net sales at the Americas segment grew 3.6% year over year to $196 million, driven by improvement in AUV, partially offset by lower volumes in Latin America. Operating income decreased to $43 million in the quarter from $58.5 million in the prior-year quarter, led by the inclusion of standalone costs as a result of the AFI separation.
EMEA: The EMEA segment’s sales declined 12.3% year over year to $63.7 million from $72.6 in the year-ago quarter. Excluding the impact of foreign exchange of approximately $4 million, net sales in the EMEA for the fourth quarter dipped 7.3%, due to lower volumes, as lower sales in the UK and Middle East were partially offset by higher sales in Russia. The company posted operating loss of $3 million compared to a loss of $4.9 million in the prior-year quarter, aided by lower SG&A costs, and lower manufacturing and input costs.
Pacific Rim: Net sales in the reported quarter climbed 7.7% year over year to $37.8 million. Excluding the impact of foreign exchange, sales increased 8.5%, driven by higher volumes in Australia and China. Operating income came in at $1.9 million compared with a loss of $2.6 million last quarter due to the margin impact of higher volumes, and lower manufacturing and input costs, which were partially offset by unfavorable AUV.
Financials
Armstrong World reported cash and cash equivalents of $141.9 million as of Dec 31, 2016, compared with $209.3 million as of Dec 31, 2015. The company recorded cash flow from operations of $49.3 million as of Dec 31, 2016 compared with $203.7 million as of Dec 31, 2015.
2016 Performance
Armstrong World posted earnings of $2.29 per share for 2016, up 33% year over year. Earnings beat the Zacks Consensus Estimate of $2.25. Revenues for full-year 2016 remained flat year over year at $1.23 billion. Revenues missed the Zacks Consensus Estimate of $1.24 billion.
Outlook
Armstrong World projects 2017 full-year sales to be in the $1.29–$1.32 billion range and adjusted EBITDA to be in the $350–$360 million range, both up from 2016. 2017 adjusted EPS is estimated to line in the band of $2.60–$2.70 per diluted share and free cash flow is anticipated to be between $130 and $145 million.
Share Price Performance
In the last one year, Armstrong World has underperformed the Zacks classified Building & Construction Products Miscellaneous sub-industry with respect to price performance. The stock gained around 10.6%, while the industry rose 38.8% over the same time frame.
Zacks Rank & Key Picks
Armstrong World currently carries a Zacks Rank #5 (Strong Sell).
Owens Corning has an earnings ESP of 35.13% for the trailing four quarters. Boise Cascade has an impressive average earnings surprise of 517.51% for the last four quarters, while Louisiana-Pacific has an average earnings surprise of 66.28% for the past four quarters.
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Armstrong World (AWI) Beats Q4 Earnings, Misses Revenues
Armstrong World (AWI - Free Report) posted adjusted earnings of 45 cents per share in fourth-quarter 2016, which surged around 56% year over year. However, earnings managed to beat the Zacks Consensus Estimate by a penny.
Operational Update
Net sales remained flat year over year at $298 million. Revenues missed the Zacks Consensus Estimate of $302 million. Cost of sales remained flat year over year at $212 million. Gross profit inched up 1% to $85.7 million in the quarter.
Selling, general and administrative (SG&A) expenses plunged 23% year over year to $60 million. Operating income improved around threefold year over year to $25.7 million.
Armstrong World Industries Inc Price, Consensus and EPS Surprise
Armstrong World Industries Inc Price, Consensus and EPS Surprise | Armstrong World Industries Inc Quote
Segment Performance
Americas: Net sales at the Americas segment grew 3.6% year over year to $196 million, driven by improvement in AUV, partially offset by lower volumes in Latin America. Operating income decreased to $43 million in the quarter from $58.5 million in the prior-year quarter, led by the inclusion of standalone costs as a result of the AFI separation.
EMEA: The EMEA segment’s sales declined 12.3% year over year to $63.7 million from $72.6 in the year-ago quarter. Excluding the impact of foreign exchange of approximately $4 million, net sales in the EMEA for the fourth quarter dipped 7.3%, due to lower volumes, as lower sales in the UK and Middle East were partially offset by higher sales in Russia. The company posted operating loss of $3 million compared to a loss of $4.9 million in the prior-year quarter, aided by lower SG&A costs, and lower manufacturing and input costs.
Pacific Rim: Net sales in the reported quarter climbed 7.7% year over year to $37.8 million. Excluding the impact of foreign exchange, sales increased 8.5%, driven by higher volumes in Australia and China. Operating income came in at $1.9 million compared with a loss of $2.6 million last quarter due to the margin impact of higher volumes, and lower manufacturing and input costs, which were partially offset by unfavorable AUV.
Financials
Armstrong World reported cash and cash equivalents of $141.9 million as of Dec 31, 2016, compared with $209.3 million as of Dec 31, 2015. The company recorded cash flow from operations of $49.3 million as of Dec 31, 2016 compared with $203.7 million as of Dec 31, 2015.
2016 Performance
Armstrong World posted earnings of $2.29 per share for 2016, up 33% year over year. Earnings beat the Zacks Consensus Estimate of $2.25. Revenues for full-year 2016 remained flat year over year at $1.23 billion. Revenues missed the Zacks Consensus Estimate of $1.24 billion.
Outlook
Armstrong World projects 2017 full-year sales to be in the $1.29–$1.32 billion range and adjusted EBITDA to be in the $350–$360 million range, both up from 2016. 2017 adjusted EPS is estimated to line in the band of $2.60–$2.70 per diluted share and free cash flow is anticipated to be between $130 and $145 million.
Share Price Performance
In the last one year, Armstrong World has underperformed the Zacks classified Building & Construction Products Miscellaneous sub-industry with respect to price performance. The stock gained around 10.6%, while the industry rose 38.8% over the same time frame.
Zacks Rank & Key Picks
Armstrong World currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the sector include Owens Corning (OC - Free Report) , Boise Cascade Company (BCC - Free Report) and Louisiana-Pacific Corporation (LPX - Free Report) . All of the three stocks boast a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Owens Corning has an earnings ESP of 35.13% for the trailing four quarters. Boise Cascade has an impressive average earnings surprise of 517.51% for the last four quarters, while Louisiana-Pacific has an average earnings surprise of 66.28% for the past four quarters.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>