Armstrong Profit Tops Estimate; Again Cuts FY Earnings Guidance - Update

(RTTNews) - Flooring products and ceiling systems maker Armstrong World Industries Inc (AWI), Monday reported a decline in third-quarter profit, hurt by a marginal drop in sales and increased expenses. Nonetheless, both earnings and revenues for the quarter came in ahead of Wall Street estimates.

The company slashed its adjusted earnings outlook for 2014, but maintained its sales guidance.

Armstrong shares slid 4 percent in morning trade on the New York Stock Exchange.

CEO Matt Espe said, "Although the macroeconomic environment weakened slightly versus our previous outlook, primarily in U.S. residential and Europe, softer market conditions only partially contributed to the volume declines, as we saw industry wide capacity utilization challenges resulting in increased competitive price pressure in our European flooring business, for which we continue to evaluate strategic alternatives."

Armstrong, based in Lancaster, Pennsylvania, posted third-quarter net income of $31.8 million or $0.57 per share, compared with $55.9 million or $0.94 per share last year.

Results for the quarter included $12 million of impairment charges in its European flooring business and $7 million for charges related to plant closures in Australia and China.

Excluding items, adjusted earnings for the quarter were $0.83 per share, compared with $0.85 per share a year ago.

On average, 16 analysts polled by Thomson Reuters expected of $0.78 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the third quarter were $728.3 million, compared with $729.7 million in the prior year. Analysts expected sales of $727. million for the quarter.

For fiscal year 2014, Armstrong now expect adjusted earnings of $2.00 to $2.15 per share, from a prior range of $2.15 to $2.40 per share. Sales are still expected in the range of $2.68 billion to $2.72 billion.

Analysts currently expect earnings of $2.10 per share on sales of $2.72 billion for the year.

Armstrong stock is trading at $46.85, down $1.95 or 4.00%, on a volume of 0.77 million shares.