Armstrong World (AWI) to Report Q4 Earnings: What to Expect?
Armstrong World Industries, Inc. AWI is scheduled to report fourth-quarter 2023 results on Feb 20, before the opening bell.
In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 23.1% and 4.9%, respectively. On a year-over-year basis, the top and bottom lines grew 6.9% and 17.6%, respectively.
Markedly, its earnings surpassed expectations in three out of the last four quarters and missed on one occasion, the average surprise being 7.9%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Armstrong World’s fourth-quarter earnings per share remained unchanged at $1.03 over the past 60 days. The estimated figure indicates a 4.6% decline from the year-ago quarter’s figure of earnings of $1.08 per share.
Armstrong World Industries, Inc. Price and EPS Surprise
Armstrong World Industries, Inc. price-eps-surprise | Armstrong World Industries, Inc. Quote
The consensus estimate for net sales is pegged at $307.9 million, indicating a 1.1% increase from the year-ago quarter’s figure.
Factors to Note
Revenues
Armstrong World’s net sales are expected to have grown year over year, most likely due to its diversified end markets, consistent Mineral Fiber average unit value (AUV) growth and appealing growth initiatives. Also, its focus on investing in new products, digital enhancements and bolt-on acquisitions is likely to have aided the uptrend.
Segment wise, for the to-be-reported quarter, solid AUV, on the back of favorable price and mix, is likely to have driven volumes in Mineral Fiber, yet challenging macroeconomic conditions are expected to have partially offset the growth. Our model predicts Mineral Fiber segment sales (71.9% of third-quarter 2023 revenues) to be $216 million, suggesting flat year-over-year growth. We expect the Mineral Fiber segment’s adjusted operating income to be $55.6 million, down 8.8% from the year-ago level of $61 million.
Solid sales growth in metal products and contributions from the acquisitions of GC Products, Inc. and BOK Modern, LLC., are likely to have aided the Architectural Specialties business.
Our model predicts the Architectural Specialties segment’s sales (accounted for 28.1% of third-quarter 2023 total revenues) to be $91.7 million, suggesting an increase of 3.6% from the year-ago figure of $88.5 million. We expect the segment’s adjusted operating income to be $10.8 million, suggesting an increase of 8.2% from the year-ago levels of $10 million.
Earnings
The company’s bottom line is expected to have declined on a year-over-year basis. High costs along with increased selling expenses and incentive compensation are likely to have impacted the downtrend. For the to-be-reported quarter, our model predicts the company’s SG&A expenses to be $60.9 million, up 3.1% year over year. Also, we expect total adjusted operating income to be $66.4 million, down 6.4% from year-ago levels of $71 million.
Nonetheless, improving input costs and other cost-effective measures are likely to have partially offset the impact of high costs and expenses.
What the Zacks Model Unveils
Our proven model predicts 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) increased the odds of an earnings beat.
Earnings ESP: Armstrong World has an Earnings ESP of +2.66%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Armstrong World currently carries a Zacks Rank of 2.
Other Stocks Poised to Beat Earnings
Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
JELD-WEN Holding, Inc. JELD currently has an Earnings ESP of +10.90% and has a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
JELD’s earnings topped the consensus mark in each of the last four quarters, with the average surprise being 126.5%. Earnings for the to-be-reported quarter are expected to have declined 46.8% year over year.
Floor & Decor Holdings, Inc. FND currently has an Earnings ESP of +4.87% and a Zacks Rank of 3.
FND’s earnings for the to-be-reported quarter are expected to have declined 57.8%. The company reported better-than-expected earnings in two of the last four quarters and missed on one occasion while met on another, the average surprise being 4.9%.
Masonite International Corporation DOOR currently has an Earnings ESP of +15.09% and a Zacks Rank of 3.
DOOR’s earnings for the to-be-reported quarter are expected to have declined 20.9%. The company reported better-than-expected earnings in two of the last four quarters and missed on other two occasions, the average surprise being 4.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report
Masonite International Corporation (DOOR) : Free Stock Analysis Report
JELD-WEN Holding, Inc. (JELD) : Free Stock Analysis Report
Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report
