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Will Armstrong World (AWI) be Able to Beat Earnings in Q3?

Zacks Equity Research
·4-min read

Armstrong World Industries, Inc. AWI is scheduled to report third-quarter 2022 results on Oct 25, before the opening bell.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 6.5% but increased 11.2% year over year. On the contrary, net sales increased 14.6% year over year and topped the consensus mark by 2.6%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Armstrong World’s third-quarter earnings is pegged at $1.49 per share, suggesting growth of 27.4% from the year-ago quarter’s figure of $1.17. Earnings estimates for the said period have moved down 0.7% in the past seven days, depicting analysts’ concern over the company’s growth potential. The consensus estimate for net sales is pegged at $330.91 million, indicating a 13.3% 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 is expected to have registered higher earnings and net sales in the third quarter owing to volume gains in Architectural Specialties, AUV expansion in Mineral Fiber, and acquisitions. Benefits from the acquisitions of Turf, Moz and Arktura in 2020 are also likely to get reflected in the to-be-reported quarter. AWI’s focus on digitalization initiatives and new technology enhancement are encouraging.

The Zacks Consensus Estimate for Architectural Specialties segment sales is pegged at $83 million, suggesting an increase of 6.4% from the year-ago levels. The same for Mineral Fiber segment sales is pegged at $239 million, up 11.2% from the year-ago levels.

The bottom line is expected to have pressurized in the quarter to be reported, thanks to intense inflationary pressure, particularly on input materials and labor. Also, short-term project delays due to material and labor shortages are likely to have impacted third-quarter sales.

Moreover, heavy investment in healthy spaces and digitization are increasing costs and thereby denting margins.

What the Zacks Model Unveils

Our proven model doesn’t not conclusively 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) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, AWI has a Zacks Rank #3 and an Earnings ESP of -7.18%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

PulteGroup, Inc. PHM has an Earnings ESP of +1.75% and a Zacks Rank #3.

PHM’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.6%. Earnings for the to-be-reported quarter are expected to increase 51.7% year over year.

Boise Cascade Company BCC has an Earnings ESP of +3.29% and a Zacks Rank #1.

BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 27.1%. Earnings for the to-be-reported quarter are expected to increase 92.6% year over year.

KBR, Inc. KBR has an Earnings ESP of +1.60% and a Zacks Rank #3.

KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 11.5%. Earnings for the to-be-reported quarter are expected to decline 1.6% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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PulteGroup, Inc. (PHM) : Free Stock Analysis Report
 
KBR, Inc. (KBR) : Free Stock Analysis Report
 
Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report
 
Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
 
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Zacks Investment Research