Armstrong World Industries records worse than expected earnings and revenue in Q1

Armstrong World Industries (NYSE: AWI) released its Q1 earnings report on Monday that missed analysts’ estimates for earnings and revenue. In the past four quarters, the company has recorded stronger than expected earnings in three.

The company reported £182 million loss in the first quarter that translates to £3.79 per share. The adjusted EBITDA, Armstrong added, came in 5% stronger than the Q1 last year.

Armstrong said that it made 89 pence of earnings per share (adjusted) in the first quarter as compared to the analysts’ estimate for 92 pence per share (adjusted). Earnings for the manufacturer of walls and ceilings remained unchanged in Q1 as compared to the same quarter last year.

Armstrong misses revenue estimate by 2.73% in Q1

In terms of revenue, the company registered £200 million in the recent quarter that also came roughly 2.73% lower as compared to the consensus estimate. In the comparable quarter last year, Armstrong had noted £195 million in revenue.

The ongoing Coronavirus pandemic that has so far infected more than 3 million people worldwide and has caused over 207,000 deaths, also pushed the Lancaster-headquartered firm into suspending its financial guidance for 2020.

Armstrong’s financial report on Monday also printed its operating income in the first quarter at £61 million that marked a massive 39% increase as compared to the year-ago figure. Its non-operating income, on the other hand, booked a £301 million non-cash charge attributed to the £800 million pension risk transfer.

Unallocated corporate expense declines in the first quarter

The Pennsylvania firm also reported its unallocated corporate expense to have declined from £1.69 million in Q1 last year to £1.21 million in the recent quarter. Armstrong cited a lack of amortization and depreciation ascribed to its mineral fibre plant that remained idled in Q1 in mainland China for the decrease in unallocated corporate expense.

At £62 per share, Armstrong World Industries is currently around 18% down year to date in the stock market. In comparison, the benchmark S&P 500 index has lost roughly 13% in 2020 so far.

In late March, the stock had dropped to as low as £54 per share but recovered quickly in the subsequent months. Armstrong performed largely upbeat in 2019 with an annual gain of more than 50%.

At the time of writing, Armstrong World Industries is valued at £3 billion and has a price to earnings ratio of 15.90.