It has been about a month since the last earnings report for Armstrong World Industries (AWI Quick QuoteAWI - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Armstrong World Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Armstrong World Q2 Earnings & Sales Top, Raises 2025 Outlook

Armstrong World posted robust second-quarter 2025 results, beating the Zacks Consensus Estimates on adjusted earnings and net sales and growing year over year.

Revenues and Earnings Beat the Street

Adjusted earnings were $2.09 per share, up 29% from $1.62 in the prior year and above the Zacks Consensus Estimate of $2.09 by 19.4%.

Net sales rose 16.3% year over year to $424.6 million and also surpassed the consensus mark of $425 million by 5.2%.

Segment Highlights

Mineral Fiber: Net sales climbed 6.7% to $267 million, driven by a 5% improvement in Average Unit Value (AUV) and modest volume growth. Adjusted EBITDA rose 16% to $121 million.

Architectural Specialties: Net sales surged 37% to $157.6 million, largely from the 2024 acquisitions of 3form and Zahner, along with 15% organic growth. Adjusted EBITDA increased 61% to $34 million.

Margin Expansion Remains the Standout

Gross profit reached $175.8 million, up from $149.3 million, translating to a gross margin of 41.4%, a modest improvement from the prior year. Adjusted operating income rose 30% to $123.2 million, with operating margin improving 300 basis points to 29.0%.

Adjusted EBITDA increased 23% to $154 million, with EBITDA margin expanding 200 basis points to 36.3%.

Balance Sheet and Capital Allocation

Armstrong World ended the second quarter with $81.1 million in cash and cash equivalents, total liquidity of approximately $150 million (including availability under its revolver), and long-term debt of $461.8 million. Operating cash flow year-to-date improved 46% to $122.6 million.

During the first six months of 2025, Armstrong World repurchased 0.4 million shares for $52 million, excluding commissions and taxes. As of June 30, 2025, $609.8 million worth of shares have remained under the current authorized share repurchase program. During the same time frame, the company paid dividends worth $27 million.

2025 Guidance Raised

Armstrong World now anticipates net sales to be within $1.60-$1.63 billion (up from $1.57-$1.61 billion expected earlier), indicating an 11-13% increase from the year-ago figure.

Adjusted EBITDA is now estimated to be within $545-$560 million (up from $525-$545 million expected earlier), indicating a rise of 12-15% year over year. Adjusted earnings per share are now expected to be between $7.15 and $7.30 (compared with $6.85-$7.15 expected earlier), implying growth of 13-16% from the reported figure of 2024.

Adjusted free cash flow is now anticipated to be between $330-$345 million (up from $315-$335 million expected earlier), indicating an 11-16% increase year over year.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a flat trend in estimates revision.

VGM Scores

Currently, Armstrong World Industries has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Armstrong World Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Armstrong World Industries is part of the Zacks Building Products - Miscellaneous industry. Over the past month, United Rentals (URI Quick QuoteURI - Free Report) , a stock from the same industry, has gained 7.8%. The company reported its results for the quarter ended June 2025 more than a month ago.

United Rentals reported revenues of $3.94 billion in the last reported quarter, representing a year-over-year change of +4.5%. EPS of $10.47 for the same period compares with $10.70 a year ago.

United Rentals is expected to post earnings of $12.43 per share for the current quarter, representing a year-over-year change of +5.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0%.

United Rentals has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.