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Last Update: 19-Feb-13 07:57 ET
Armstrong World beats on earnings; shares little changed
Armstrong World Industries (AWI $56.23 +0.00) reported fourth quarter earnings of $0.34 per share, excluding non-recurring items, $0.02 better than the Capital IQ consensus of $0.32, while revenues fell 1.6% year/year to $612.8 million versus the $609.47 mln consensus. Excluding approximately $4 million of unfavorable foreign exchange impact for the quarter, sales declined approximately 1% compared to the prior year period. Improvements in price offset volume declines and unfavorable mix. The sale of the Patriot wood flooring distribution business which occurred in the third quarter of 2012, negatively impacted sales for the fourth quarter of 2012 by ~$7 million when compared to the same period in 2011. Co issues downside guidance for Q1, sees Q1 revs of $600-650 mln vs. $646.35 mln Capital IQ Consensus Estimate. Co issues guidance for FY13, sees EPS of $2.30-2.60, excluding non-recurring items, vs. $2.88 Capital IQ Consensus Estimate; sees FY13 revs of $2.7-2.8 bln vs. $2.71 bln Capital IQ Consensus Estimate. For 2013, the Company expects U.S. GDP of ~2%, which translates into a flat to slightly down commercial opportunity, with continued weakness in education and, to a lesser extent, healthcare. New residential construction should continue to improve and new home starts are expected to be ~950,000 in 2013. The Company remains cautious on the outlook for residential repair and remodel activity and expects it to be flat to up slightly despite pent up demand, as consumers seem willing to defer action until they are more confident rather than trade down. In Europe, GDP is expected to show slight positive growth in the U.K., and be flat to down slightly in the Eurozone. This type of operating environment translates into lower sales in those regions, but expected growth in Eastern Europe, particularly in Russia, should disproportionably benefit the ceilings business. In the Pacific Rim, Australia is expected to continue to be a challenge and down year on year, but solid growth is expected in China.
