Armstrong World Industries Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Armstrong World Industries (NYS: AWI) reported earnings on July 29. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Armstrong World Industries beat slightly on revenues and missed slightly on earnings per share.

Compared to the prior-year quarter, revenue was unchanged. Non-GAAP earnings per share shrank. GAAP earnings per share dropped significantly.


Margins shrank across the board.

Revenue details
 Armstrong World Industries chalked up revenue of $706.6 million. The 11 analysts polled by S&P Capital IQ expected net sales of $696.0 million on the same basis. GAAP reported sales were 4.6% higher than the prior-year quarter's $675.4 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

EPS details
 EPS came in at $0.62. The 12 earnings estimates compiled by S&P Capital IQ averaged $0.63 per share. Non-GAAP EPS of $0.62 for Q2 were 13% lower than the prior-year quarter's $0.71 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.) GAAP EPS of $0.50 for Q2 were 29% lower than the prior-year quarter's $0.70 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

Margin details
 For the quarter, gross margin was 23.3%, 260 basis points worse than the prior-year quarter. Operating margin was 7.5%, 290 basis points worse than the prior-year quarter. Net margin was 4.2%, 200 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $745.8 million. On the bottom line, the average EPS estimate is $0.90.

Next year's average estimate for revenue is $2.71 billion. The average EPS estimate is $2.18.

Investor sentiment
 The stock has a three-star rating (out of five) at Motley Fool CAPS, with 51 members out of 66 rating the stock outperform, and 15 members rating it underperform. Among 18 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give Armstrong World Industries a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Armstrong World Industries is hold, with an average price target of $58.75.

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The article Armstrong World Industries Increases Sales but Misses Estimates on Earnings originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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