Armstrong World's Q3 Earnings & Net Sales Beat Estimates, '24 View Up

Core Viewpoint - Armstrong World Industries, Inc. (AWI) reported strong third-quarter 2024 results, with earnings and net sales exceeding expectations and showing year-over-year growth [1][4]. Financial Performance - Adjusted EPS was $1.81, surpassing the Zacks Consensus Estimate of $1.75 by 3.4%, and grew 13.1% year over year from $1.60 [4]. - Net sales reached $386.6 million, exceeding the consensus mark of $385.7 million by 0.2% and increasing 11.3% year over year [4]. - Adjusted EBITDA rose 11.2% from the previous year to $139 million, although the adjusted EBITDA margin contracted by 10 basis points to 35.9% [5]. Segment Performance - Mineral Fiber Segment: - Net sales grew 3.3% year over year to $258 million, driven by a 10% increase in average unit value (AUV) [6]. - Operating income increased 8.8% to $93 million, with an operating margin expansion of 180 basis points to 36% [7]. - Architectural Specialties Segment: - Net sales surged 31.8% year over year to $128.6 million, supported by a $25 million contribution from recent acquisitions [8]. - Operating income rose 23.9% to $19.2 million, with adjusted EBITDA growing 27.1% to $26 million [9]. Cash Flow and Share Repurchase - As of September 30, 2024, cash and cash equivalents were $73.7 million, up from $70.8 million at the end of 2023 [10]. - Net cash provided by operations was $97 million in the third quarter, compared to $83 million in the same period last year [10]. - The company repurchased 0.1 million shares for $15 million during the quarter, with $677 million remaining under the current share repurchase program [11]. 2024 Guidance Update - The company raised its 2024 net sales guidance to a range of $1,420-$1,435 million, reflecting a 10-11% increase from the previous year [13]. - Adjusted EBITDA is now projected to be between $482 million and $490 million, indicating a 12-14% growth from $430 million in 2023 [14]. - Adjusted EPS is expected to increase 16-17% year over year to a range of $6.15-$6.25 [15].