Armstrong World Stock Up on Q1 Earnings & Net Sales Beat

Armstrong World Industries, Inc. AWI reported solid results for first-quarter 2025, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.

Following the results, shares of this international designer and manufacturer of wall and ceiling building materials notably gained 4.6% during yesterday’s trading session.

Armstrong World kicked off 2025 with a strong performance, achieving double-digit growth in net sales and earnings. This was driven by robust Mineral Fiber Average Unit Value or AUV results, improved manufacturing productivity, and the combined impact of organic growth in Architectural Specialties and significant contributions from 2024 acquisitions.

AWI’s Earnings & Sales Discussion

Armstrong World reported adjusted earnings per share (EPS) of $1.66, which topped the Zacks Consensus Estimate of $1.55 by 7.1%. The metric also grew 20.3% year over year from $38 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Armstrong World Industries, Inc. Price, Consensus and EPS Surprise

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

Net sales of $382.7 million also surpassed the consensus mark of $373 million by 2.7% and increased 17.3% year over year. This upside was driven by a higher sales volume of $41 million and a favorable AUV of $16 million.

Adjusted EBITDA increased 16.2% from the year-ago quarter’s figure to $129 million. However, adjusted EBITDA margin contracted 30 basis points (bps) from the year-ago quarter to 33.6%. Our estimate for adjusted EBITDA and adjusted EBITDA margin was $125.6 million and 33.9%, respectively.

AWI’s Segmental Performance

Mineral Fiber: The segment’s net sales grew 2.3% on a year-over-year basis to $245.1 million on the back of $16 million of favorable AUV, driven by positive like-for-like pricing and mix. However, the upside was partially offset by $10 million of lower sales volumes owing to weak demand from home center customers and the impact of one less shipping day compared to the prior-year period.

The segment reported an operating income of $84.5 million, up 6.7% from the year-ago quarter. Operating margin expanded 140 bps from the year-ago quarter’s levels to 34.5%. Adjusted EBITDA increased 6.7% from the year-ago quarter’s figure to $105 million. Adjusted EBITDA margin also rose 180 bps in the quarter to 43%.

Architectural Specialties: Net sales in the segment increased 58.7% year over year to $137.6 million, driven by a $41 million contribution from Zahner and 3form, and a moderate increase in custom project net sales.

The segment reported an operating income of $14.8 million, portraying a whopping 92.2% year-over-year increase. Adjusted EBITDA for the quarter was $24 million, indicating 93.6% growth year over year. On a year-over-year basis, the operating margin expanded 190 bps while the adjusted EBITDA margin expanded 310 bps.

Armstrong World’s Financials

As of March 31, 2025, Armstrong World had cash and cash equivalents of $82.8 million compared with $79.3 million at 2024-end. Net cash provided by operations was $41 million in the quarter compared with $26 million in the year-ago period.

Adjusted free cash flow was $48 million in first-quarter 2025 compared with $43 million reported in the year-ago quarter.

During the reported quarter, the company repurchased 0.1 million shares of common stock for $22 million, excluding commissions and tax costs. As of March 31, 2025, $640 million of shares remained under the current authorized share repurchase program.

AWI’s 2025 Guidance Maintained

Armstrong World anticipates net sales to be within $1,570-$1,610 million, indicating a 9-11% increase from the year-ago figure.

Segment-wise, Mineral Fiber sales are expected to grow around 5%. Architectural Specialties’ sales are anticipated to grow by more than 20%.

Adjusted EBITDA is estimated to be within $525-$545 million, indicating a rise of 8-12% year over year. The company expects its adjusted earnings per share to be between $6.85 and $7.15, implying growth of 9-13% from the reported figure of 2024.

Adjusted free cash flow is anticipated to be between $315 million and $335 million, indicating a 6-12% increase year over year.

AWI’s Zacks Rank & Recent Construction Releases

Armstrong World currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masco Corporation MAS posted weaker-than-expected results for the first quarter of 2025, with both earnings and revenues falling short of the Zacks Consensus Estimate. The company reported adjusted EPS of 87 cents, down from 93 cents a year ago. Net sales of $1.8 billion declined 6% from the prior-year period. Excluding divestitures, net sales of Masco declined 3% year over year in local currency.

Citing ongoing uncertainty around how these external developments will affect industry-wide demand, pricing dynamics and input costs, Masco management has refrained from providing full-year 2025 financial guidance.

Leggett & Platt, Incorporated LEG reported first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Leggett reported adjusted EPS of 24 cents, an increase from the year-ago adjusted EPS of 23 cents. Net trade sales of $1.022 billion declined 7% from the prior-year quarter’s $1.097 billion (all organic).

Leggett has largely maintained its full-year guidance, with a few updates to volume and pricing expectations. The company still expects sales of $4-$4.3 billion, indicating a 2-9% decline year over year.

UFP Industries, Inc. UFPI reported tepid results for the first quarter of 2025. Both earnings and net sales missed the Zacks Consensus Estimate and declined year over year.

The quarterly results of UFP Industries were affected by softer demand and broad-based pricing pressures. While economic challenges are expected to persist in 2025, UFP Industries noted sequential improvement in business activity throughout the quarter, which continued into April.

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