We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Armstrong World Industries (AWI) Down 4.9% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Armstrong World Industries (AWI - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Armstrong World Industries due for a breakout? 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 drivers.
Armstrong World Q2 Earnings & Net Sales Beat, View Up
Armstrong World 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
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 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.
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%.
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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Armstrong World Industries has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Armstrong World Industries has a Zacks Rank #2 (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, Masco (MAS - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2024 more than a month ago.
Masco reported revenues of $2.09 billion in the last reported quarter, representing a year-over-year change of -1.7%. EPS of $1.20 for the same period compares with $1.19 a year ago.
For the current quarter, Masco is expected to post earnings of $1.08 per share, indicating a change of +8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Masco. Also, the stock has a VGM Score of A.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Armstrong World Industries (AWI) Down 4.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Armstrong World Industries (AWI - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Armstrong World Industries due for a breakout? 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 drivers.
Armstrong World Q2 Earnings & Net Sales Beat, View Up
Armstrong World 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
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 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.
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%.
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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Armstrong World Industries has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Armstrong World Industries has a Zacks Rank #2 (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, Masco (MAS - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2024 more than a month ago.
Masco reported revenues of $2.09 billion in the last reported quarter, representing a year-over-year change of -1.7%. EPS of $1.20 for the same period compares with $1.19 a year ago.
For the current quarter, Masco is expected to post earnings of $1.08 per share, indicating a change of +8% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Masco. Also, the stock has a VGM Score of A.