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Armstrong World (AWI) Q2 Earnings & Net Sales Beat, View Up
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Armstrong World Industries, Inc. (AWI - Free Report) reported solid results for second-quarter 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis. Following the results, shares of this international designer and manufacturer of wall and ceiling building materials grew 1.1% on Jul 30.
The company’s growth trend was backed by solid contributions from the Mineral Fiber as well as Architectural Specialties segments. Growth was attributable to the increase in average unit value (AUV) and volume. Also, contributions from recent acquisitions aided the uptrend.
Given the solid second-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for all key metrics.
Inside the Headlines
Armstrong World reported adjusted earnings per share (EPS) of $1.62, which topped the Zacks Consensus Estimate of $1.53 by 5.9%. The metric also grew 17.4% year over year from earnings of $1.38 per share.
Armstrong World Industries, Inc. Price, Consensus and EPS Surprise
Net sales of $365.1 million also surpassed the consensus mark of $316 million by 1.2% and increased 12.2% year over year. The upside was driven by a favorable AUV of $13 million partially and a higher sales volume of $27 million.
Adjusted EBITDA increased 12.5% from the year-ago quarter’s figure to $125 million. Adjusted EBITDA margin rose 10 bps from the year-ago quarter to 34.3%. 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 6.9% on a year-over-year basis to $250.2 million on the back of 6% growth of favorable AUV driven primarily by positive like-for-like pricing and a modest contribution from favorable mix. Volume also grew on stabilizing demand and benefiting from growth initiatives.
Adjusted EBITDA increased 10.4% from the year-ago quarter’s figure to $104 million. Adjusted EBITDA margin also rose 130 bps during the quarter to 41.7%. Input costs were low on lower freight and energy costs and inventory valuations, partially offset by increased incentives and inflationary pressures.
Architectural Specialties: Net sales in the segment increased 25.7% year over year to $114.9 million, driven by a $20 million contribution from 3form and BOK and a moderate increase in custom project net sales. Our estimate for this segment’s net sales was $88.2 million.
Adjusted EBITDA for the quarter was $21 million, indicating 25.1% growth year over year. On a year-over-year basis, the adjusted EBITDA margin contracted 10 bps to 18.4% due to acquisitions.
Financials
As of Jun 30, 2024, Armstrong World had cash and cash equivalents of $73.6 million compared with $70.8 million at 2023-end. Long-term debt, less current installments, was $621.5 million versus $564.3 million at 2023-end.
Net cash provided by operations was $57 million in the second quarter compared with $68 million in the year-ago period. Adjusted free cash flow was $62 million, down from $73 million reported in the year-ago quarter.
During the reported quarter, the company repurchased 0.1 million shares of common stock for $10 million, excluding commissions and tax costs. As of Jun 30, 2024, $692 million shares were remaining under the current authorized share repurchase program.
Raised 2024 Guidance
The company now anticipates net sales in the range of $1,415-$1,440 million, up from prior expectations of $1,395-$1,435 million, indicating a 9-11% increase from the year-ago figure of $1,295 million.
Segment-wise, Mineral Fiber sales are now expected to grow 4-6%, up from 2-5% expected earlier. Architectural Specialties’ sales are anticipated to rise 22-24% from the prior projection of 21-24%.
Adjusted EBITDA is now projected to be between $474 million and $486 million, up from the previously expected range of $465-$485 million, reflecting 10-13% growth from $430 million in 2023. Mineral Fiber’s adjusted EBITDA margin is now anticipated to be approximately 41%, up from 40% expected earlier. Architectural Specialties’ adjusted EBITDA margin is still anticipated to be 18%.
Armstrong World now expects adjusted EPS to increase 13-16% year over year to $6.00-$6.15 (priorly expected between $5.80 and $6.05) from the 2023 reported figure of $5.32.
Adjusted free cash flow is now anticipated to be in the range of $288-$300 million compared with a previous projection of $285-$300 million, indicating a 10-14% increase year over year.
Masco Corporation (MAS - Free Report) reported strong earnings for the second quarter of 2024 amid challenging market conditions. Strong operational efficiency helped it deliver solid results.
However, net sales missed the analysts’ expectations and declined on a year-over-year basis. Masco’s focus on a balanced capital deployment strategy helped it return $206 million to shareholders via dividends and share repurchases. Masco narrowed its adjusted EPS guidance while the mid-point remains unaffected.
United Rentals, Inc. (URI - Free Report) reported mixed second-quarter 2024 results. The company’s EPS surpassed the Zacks Consensus Estimate, but revenues missed the same. Nonetheless, both metrics registered improvement on a year-over-year basis.
The company showcased robust second-quarter results for 2024, achieving record highs in revenues, adjusted EBITDA, and EPS. The company's performance aligns with its expectations for the year, driven by the successful integration of Yak. This acquisition enhances URI's strategy to expand its specialty rental business, enhance its one-stop-shop offerings, and leverage opportunities for both secular growth and cross-selling. The company's unwavering commitment to safety, operational excellence, and innovation underpins its unique value proposition, positioning it for long-term shareholder value.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in the second quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate and grew year over year. The company reported better-than-expected earnings in the trailing seven quarters.
However, quarterly net sales missed the consensus mark and declined on a year-over-year basis.
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Armstrong World (AWI) Q2 Earnings & Net Sales Beat, View Up
Armstrong World Industries, Inc. (AWI - Free Report) reported solid results for second-quarter 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis. Following the results, shares of this international designer and manufacturer of wall and ceiling building materials grew 1.1% on Jul 30.
The company’s growth trend was backed by solid contributions from the Mineral Fiber as well as Architectural Specialties segments. Growth was attributable to the increase in average unit value (AUV) and volume. Also, contributions from recent acquisitions aided the uptrend.
Given the solid second-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for all key metrics.
Inside the Headlines
Armstrong World reported adjusted earnings per share (EPS) of $1.62, which topped the Zacks Consensus Estimate of $1.53 by 5.9%. The metric also grew 17.4% year over year from earnings of $1.38 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 $365.1 million also surpassed the consensus mark of $316 million by 1.2% and increased 12.2% year over year. The upside was driven by a favorable AUV of $13 million partially and a higher sales volume of $27 million.
Adjusted EBITDA increased 12.5% from the year-ago quarter’s figure to $125 million. Adjusted EBITDA margin rose 10 bps from the year-ago quarter to 34.3%. 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 6.9% on a year-over-year basis to $250.2 million on the back of 6% growth of favorable AUV driven primarily by positive like-for-like pricing and a modest contribution from favorable mix. Volume also grew on stabilizing demand and benefiting from growth initiatives.
Adjusted EBITDA increased 10.4% from the year-ago quarter’s figure to $104 million. Adjusted EBITDA margin also rose 130 bps during the quarter to 41.7%. Input costs were low on lower freight and energy costs and inventory valuations, partially offset by increased incentives and inflationary pressures.
Architectural Specialties: Net sales in the segment increased 25.7% year over year to $114.9 million, driven by a $20 million contribution from 3form and BOK and a moderate increase in custom project net sales. Our estimate for this segment’s net sales was $88.2 million.
Adjusted EBITDA for the quarter was $21 million, indicating 25.1% growth year over year. On a year-over-year basis, the adjusted EBITDA margin contracted 10 bps to 18.4% due to acquisitions.
Financials
As of Jun 30, 2024, Armstrong World had cash and cash equivalents of $73.6 million compared with $70.8 million at 2023-end. Long-term debt, less current installments, was $621.5 million versus $564.3 million at 2023-end.
Net cash provided by operations was $57 million in the second quarter compared with $68 million in the year-ago period. Adjusted free cash flow was $62 million, down from $73 million reported in the year-ago quarter.
During the reported quarter, the company repurchased 0.1 million shares of common stock for $10 million, excluding commissions and tax costs. As of Jun 30, 2024, $692 million shares were remaining under the current authorized share repurchase program.
Raised 2024 Guidance
The company now anticipates net sales in the range of $1,415-$1,440 million, up from prior expectations of $1,395-$1,435 million, indicating a 9-11% increase from the year-ago figure of $1,295 million.
Segment-wise, Mineral Fiber sales are now expected to grow 4-6%, up from 2-5% expected earlier. Architectural Specialties’ sales are anticipated to rise 22-24% from the prior projection of 21-24%.
Adjusted EBITDA is now projected to be between $474 million and $486 million, up from the previously expected range of $465-$485 million, reflecting 10-13% growth from $430 million in 2023. Mineral Fiber’s adjusted EBITDA margin is now anticipated to be approximately 41%, up from 40% expected earlier. Architectural Specialties’ adjusted EBITDA margin is still anticipated to be 18%.
Armstrong World now expects adjusted EPS to increase 13-16% year over year to $6.00-$6.15 (priorly expected between $5.80 and $6.05) from the 2023 reported figure of $5.32.
Adjusted free cash flow is now anticipated to be in the range of $288-$300 million compared with a previous projection of $285-$300 million, indicating a 10-14% increase year over year.
Zacks Rank & Peer Releases
Armstrong World currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masco Corporation (MAS - Free Report) reported strong earnings for the second quarter of 2024 amid challenging market conditions. Strong operational efficiency helped it deliver solid results.
However, net sales missed the analysts’ expectations and declined on a year-over-year basis. Masco’s focus on a balanced capital deployment strategy helped it return $206 million to shareholders via dividends and share repurchases. Masco narrowed its adjusted EPS guidance while the mid-point remains unaffected.
United Rentals, Inc. (URI - Free Report) reported mixed second-quarter 2024 results. The company’s EPS surpassed the Zacks Consensus Estimate, but revenues missed the same. Nonetheless, both metrics registered improvement on a year-over-year basis.
The company showcased robust second-quarter results for 2024, achieving record highs in revenues, adjusted EBITDA, and EPS. The company's performance aligns with its expectations for the year, driven by the successful integration of Yak. This acquisition enhances URI's strategy to expand its specialty rental business, enhance its one-stop-shop offerings, and leverage opportunities for both secular growth and cross-selling. The company's unwavering commitment to safety, operational excellence, and innovation underpins its unique value proposition, positioning it for long-term shareholder value.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in the second quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate and grew year over year. The company reported better-than-expected earnings in the trailing seven quarters.
However, quarterly net sales missed the consensus mark and declined on a year-over-year basis.