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Armstrong World (AWI) to Post Q1 Earnings: What's in Store?

Zacks Equity Research
·4-min read

Armstrong World Industries, Inc. AWI is slated to report first-quarter 2023 results on Apr 25, before the opening bell.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2.7% and declined 0.9% year over year. On the contrary, net sales increased 7.8% year over year and topped the consensus mark by 1.3%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Armstrong World’s first-quarter earnings is pegged at $1.06 per share, suggesting growth of 3.9% from the year-ago quarter’s figure of $1.02. Earnings estimates for the said period have moved down by a cent in the past seven days, depicting analysts’ concern over the company’s growth potential. The consensus estimate for net sales is pegged at $307.35 million, indicating an 8.8% increase from the prior-year quarter’s figure.

Armstrong World Industries, Inc. Price and EPS Surprise

 

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Armstrong World Industries, Inc. price-eps-surprise | Armstrong World Industries, Inc. Quote

Factors to Note

Armstrong World is expected to have registered slightly higher earnings and net sales in the first quarter, thanks to average unit value (AUV) expansion in Mineral Fiber and acquisition benefits. AWI’s focus on digitalization initiatives and new technology enhancements is also likely to have been encouraging.

However, weaker economic conditions are hurting volume and are likely to have offset these positives to some extent. Also, short-term project delays due to material and labor shortages are likely to have impacted first-quarter sales. The bottom line is expected to have been pressurized due to intense inflationary pressure, particularly on input materials and labor.

The Zacks Consensus Estimate for the Architectural Specialties segment's sales is pegged at $90 million, suggesting an increase of 13.9% from the year-ago reported level. The same for the Mineral Fiber segment's sales is pegged at $219 million, indicating 7.9% growth from the year-ago reported level.

The Zacks Consensus Estimate for adjusted operating income in the Architectural Specialties segment is pegged at $11.68 million, suggesting an increase from the year-ago reported level of $9 million. The same for the Mineral Fiber segment is pegged at $62 million, implying a hike from the $58 million reported in the year-ago period.

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, 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 #4 (Sell) and an Earnings ESP of -3.67%.

Stocks With the Favorable Combination

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

EMCOR Group EME has an Earnings ESP of +0.27% and a Zacks Rank #2.

EME’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.

Owens Corning’s OC earnings topped the consensus mark in all the last four quarters, the average being 12.9%. Earnings for the to-be-reported quarter are expected to decrease 22.5% year over year.

OC has an Earnings ESP of +3.18% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Rentals, Inc. URI has an Earnings ESP of +4.51% and a Zacks Rank #3.

URI’s earnings topped the consensus mark in all the last four quarters, the average being 6.9%. Earnings for the to-be-reported quarter are expected to grow 41.7% year over year.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

EMCOR Group, Inc. (EME) : Free Stock Analysis Report

Armstrong World Industries, Inc. (AWI) : Free Stock Analysis Report

United Rentals, Inc. (URI) : Free Stock Analysis Report

Owens Corning Inc (OC) : Free Stock Analysis Report

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Zacks Investment Research