Armstrong World (AWI) to Post Q3 Earnings: What's in Store?
Armstrong World Industries, Inc. AWI is scheduled to report third-quarter 2023 results on Oct 24, before the opening bell.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 5.3% and grew 7% year over year. On the contrary, net sales missed the consensus mark by 3.9% but increased by 1.4% year over year.
Markedly, its earnings surpassed expectations in two out of the last four quarters and missed on other two occasions, the average surprise being 0.2%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Armstrong World’s third-quarter earnings per share (EPS) remained unchanged at $1.30. The estimated figure indicates a 4.4% decline from the year-ago quarter’s figure of $1.36. The consensus estimate for net sales is pegged at $331.2 million, indicating a 1.9% increase from the prior-year quarter’s figure.
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 net sales are expected to register tepid growth from a year ago due to soft market conditions and continued economic uncertainty. Tepid volume, average unit value (AUV) performance and accretive acquisitions. Also, a focus on digitalization initiatives and new technology enhancements will likely contribute to the quarterly results.
Segment wise, for the to-be-reported quarter, softer market demand is likely to impact volumes in Mineral Fiber. Our model predicts Mineral Fiber segment sales (71.9% of second-quarter revenues) to be $229.9 million, suggesting a drop of 1.6% from the year-ago level of $233.7 million. We expect the Mineral Fiber segment’s adjusted operating income to be $71.2 million, almost flat compared with the year-ago levels of $71 million.
Strong bidding activity is across all the verticals, notably in transportation, healthcare and education and projects associated with the infrastructure bill will likely have aided Architectural Specialties business.
Our model predicts Architectural Specialties segment sales (accounted for 28.1% of second-quarter total revenues) to be at $99.5 million, suggesting an increase of 9% from the year-ago levels of $91.3 million. We expect the segment’s adjusted operating income to be at $11.3 million, suggesting a decrease of 5.4% from the year-ago levels of $12 million.
Meanwhile, higher raw material, energy and freight costs along with manufacturing costs will likely put pressure on the company’s third-quarter margins. For the to-be-reported quarter, our model predicts the company’s total adjusted operating income to be at $82.6 million, down 0.5% from year-ago levels of $83 million.
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.
Earnings ESP: Armstrong World has 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.
Zacks Rank: Armstrong World carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector that have the right combination of elements to post an earnings beat on their respective quarters to be reported.
Howmet Aerospace Inc. HWM has an Earnings ESP of +2.31% and a Zacks Rank #3.
HWM’s earnings topped the consensus mark in two of the last four quarters and met on other two occasions, the average being 3.2%. Earnings for the to-be-reported quarter are expected to grow 19.4% year over year.
Construction Partners, Inc. ROAD has an Earnings ESP of +2.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ROAD’s earnings topped the consensus mark in three of the last four quarters, with the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Watsco, Inc. WSO has an Earnings ESP of +1.86% and a Zacks Rank #3.
WSO’s earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, with the average being 3.5%. Earnings for the to-be-reported quarter are expected to grow 7% year over year.
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Watsco, Inc. (WSO) : Free Stock Analysis Report
Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report
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Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
