Armstrong World 3Q net income rises on lower costs
LANCASTER, Pa. (AP) — Armstrong World Industries Inc. said Monday that its third-quarter profit jumped 20 percent, as costs cuts and a lower tax rate more than offset a drop in sales.
The profit beat Wall Street predictions, but the company cut its full-year profit prediction and issued lower-than-expected revenue guidance for the current quarter, citing the sale of certain businesses and the still-sluggish home remodel and repair markets.
The Lancaster, Pa., company, which makes floors and ceilings, earned $62.9 million, or $1.05 per share, up from $52.5 million, or 89 cents per share, in the same quarter last year. Excluding one-time items, the company posted an adjusted profit from continuing operations of 97 cents per share for the recent quarter.
Analysts, on average, expected 71 cents per share, according to FactSet.
Revenue fell 5 percent to $694.7 million, short of Wall Street predictions of $709.9 million.
Armstrong credited the better-than-expected earnings to ongoing cost-cutting efforts, as well as a slight drop in its tax rate compared with the year-ago period.
Meanwhile revenue was hurt by unfavorable currency exchange rates. Armstrong, like other companies that do significant business outside the U.S., can be hurt by a rising dollar because income earned in foreign currencies shrinks when it's translated back into a stronger U.S. dollar.
Excluding the effects of exchange rates, the company said revenue fell 2 percent. In addition, Armstrong said that while it sold a more favorable mix of products at higher prices, it wasn't enough to offset a drop in sales volumes.
The company now expects to post adjusted 2012 profit of $2.35 to $2.65 per share, down from its previous prediction of $2.40 to $2.70 per share. Analysts expect $2.48 per share.
The company attributed the reduced guidance to the sale of its cabinets and Patriot flooring distribution businesses, along with continued weak demand for residential repairs and remodeling.
Armstrong also projected fourth-quarter sales of $585 million to $635 million, while analysts expect $740.1 million.
The company also said Monday that it was postponing its earnings conference call because of severe weather conditions on the East Coast, but did not announce a new date.