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Mineral Fiber Unit to Aid Armstrong World's (AWI) Q2 Earnings

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Armstrong World Industries, Inc. (AWI - Free Report) is scheduled to report second-quarter 2023 results on Jul 25, before the opening bell.

In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 5.7% and grew 9.8% year over year. Net sales also increased 9.8% year over year and topped the consensus mark by 0.9%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Armstrong World’s second-quarter earnings is pegged at $1.31 per share, suggesting growth of 1.6% from the year-ago quarter’s figure of $1.29. The consensus estimate for net sales is pegged at $338.53 million, indicating a 5.5% increase from the prior-year quarter’s figure.

Armstrong World Industries, Inc. Price and EPS Surprise

 

Armstrong World Industries, Inc. Price and EPS Surprise

Armstrong World Industries, Inc. price-eps-surprise | Armstrong World Industries, Inc. Quote

Factors to Note

Armstrong World’s earnings and net sales are expected to grow slightly in the second quarter on the back of average unit value (AUV) expansion in Mineral Fiber and accretive acquisitions. AWI’s focus on digitalization initiatives and new technology enhancements is likely to add to the benefits.

Strong bidding activity across all the verticals, with notable strength in transportation and healthcare end markets, as well as projects associated with the infrastructure bill, is likely to have aided the Architectural Specialties business.

The Zacks Consensus Estimate for Architectural Specialties segment sales is pegged at $98 million, suggesting an increase of 12.6% from the year-ago levels of $86.5 million. The Zacks Consensus Estimate for Mineral Fiber segment sales is pegged at $241 million, up 2.6% from the year-ago level of $234.5 million.

The Zacks Consensus Estimate for adjusted operating income in the Architectural Specialties segment is pegged at $12.23 million, suggesting an increase from the year-ago levels of $9 million. The Zacks Consensus Estimate for Mineral Fiber segment’s adjusted operating income is pegged at $75 million, up from $71 million reported in the year-ago period.

However, weaker economic conditions and challenges in the commercial construction market are hurting volume and offsetting these positives to some extent. Short-term project delays due to material and labor shortages are likely to have impacted second-quarter sales. The bottom line is expected to have been pressurized due to intense inflationary pressure, particularly on input materials and labor.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Armstrong World this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Currently, AWI has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

PulteGroup, Inc. (PHM - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PHM’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 15.6%. Earnings for the to-be-reported quarter are expected to decrease 9.5% year over year.

Owens Corning’s (OC - Free Report) earnings topped the consensus mark in all the last four quarters, the average being 15.1%. Earnings for the to-be-reported quarter are expected to decrease 17.8% year over year.

OC has an Earnings ESP of +0.19% and flaunts a Zacks Rank #1 at present.

Installed Building Products, Inc. (IBP - Free Report) currently has an Earnings ESP of +2.08% and sports a Zacks Rank #1.

IBP’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average being 9%. Earnings for the to-be-reported quarter are expected to decline 8.1% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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