Armstrong World Profit Declines, Cuts FY Guidance; Stock Down - Update

(RTTNews) - Armstrong World Industries Inc (AWI), the flooring products and ceiling systems maker, Monday reported a decline in second-quarter profit, hurt by lumber costs, severance charges and soft volumes in Europe and the Americas, offsetting a small climb in sales. Both earnings and revenue for the quarter missed Wall Street estimates.

Armstrong slashed its earnings and sales guidance for 2014, citing weak demand for its products. Shares of the company slid 8 percent in morning trade on the New York Stock Exchange.

Lancaster, Pennsylvania-based Armstrong posted quarterly net earnings of $19 million or $0.34 per share, compared with $30 million or $0.50 per share last year.

Excluding items, adjusted earnings for the quarter were $33 million or $0.60 per share.

On average, 16 analysts polled by Thomson Reuters estimated earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter included $8 million in charges related to the closure of its resilient flooring plant in Thomastown, Australia, and engineered wood flooring plant in Kunshan, China.

Sales for the quarter climbed 0.5 percent to $710 million from $706.6 million in the prior year, helped by favorable price and mix. Analysts projected sales of $724.8 million for the quarter.

Resilient flooring segment sales slid 2 percent from a year ago, and wood flooring sales was down about 1 percent.

Results were mainly offset by cost of sales that climbed to $554 million from $542 million last year, and selling and general expenses increased to $114 million from $111 million.

For the third quarter, Armstrong anticipate sales of $740 million to $780 million, while analysts currently expect about $759 million.

For fiscal year 2014, the company now projects adjusted earnings of $2.15 to $2.40 per share on sales of $2.7 billion to $2.8 billion, from its prior earnings guidance of $2.55 to $2.80 per share with sales of $2.8 to $2.9 billion.

Armstrong is trading at $51.00, down $4.37 or 7.89%, on a volume of 2.6 million shares.