Armstrong World (AWI) Misses Q4 EPS by 3c, Revenues Miss

Armstrong World (NYSE: AWI) reported Q4 EPS of $0.80, $0.03 worse than the analyst estimate of $0.83. Revenue for the quarter came in at $238.9 million versus the consensus estimate of $239.46 million.

• As reported net sales of $238.9 million, up 11% versus the prior year quarter
• As reported operating income of $52.5 million, up 21% versus the prior year quarter
• As reported Architectural Specialties segment sales grew 29% in the quarter
• Adjusted EBITDA grew 16% and free cash flow grew 19% in the quarter
• Full year sales grew 9%, adjusted EBITDA grew 11% and free cash flow grew 61%

“Our strong fourth quarter capped another solid year for AWI. For the full year, sales were up 9%, accelerating from 7% growth in 2017,” said Vic Grizzle, President and CEO of Armstrong. “In 2018 I was especially pleased with our ability to expand margins in an inflationary environment and with our free cash flow generation of $236 million, an improvement of 61% versus 2017.”

Market Outlook and 2019 Guidance“We expect economic conditions in 2019 to be similar to 2018. Accordingly, our 2019 outlook is consistent with the value creation model we disclosed during our investor day last November. We project high-single digit sales growth fueled by volume gains in Architectural Specialties, AUV expansion in Mineral Fiber and acquisitions. We anticipate adjusted EBITDA growth of greater than 10%, driven by sales growth, ongoing productivity and earnings from WAVE,” said Brian MacNeal, CFO of Armstrong. “Once again, we are projecting free cash flow of greater than 20% of sales.”

For earnings history and earnings-related data on Armstrong World (AWI) click here.

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