Monday, I mentioned the breakout happening in Armstrong World Industries (AWI) [Nov 1, 2010: Keeping an Eye on Armstrong World Industries] but did not want to jump in ahead of earnings. The technical breakout continued all week, and last night's earnings caused a massive jump this morning, although the stock is giving quite a bit back already. However, it does strike me as *interesting* in terms of "information leak" to watch how the stock moved ....
The results aren't 'great' by any means, but since they beat analysts expectations by a wide margin with a small increase in guidance and the stock was range bound for months, that was all it took. While I like to buy breakouts, I prefer it to be in companies with business that is either very good secularly, or improving dramatically on a cyclical basis. This is sort of a "meh" type of fundamental story...
- Armstrong World Industries Inc (AWI) posted better-than-expected quarterly profit, helped by growth at its building products segment, and raised its full-year earnings outlook.
- Armstrong World, which makes flooring products, ceiling systems and kitchen and bathroom cabinets, now expects 2010 adjusted earnings of $1.69-$1.79 per share, up from its prior view of $1.55-$1.75 per share.
- The company also narrowed its 2010 sales outlook to $2.76-$2.80 billion, from its previous outlook of $2.70-$2.85 billion.
- The building products segment grew 6 percent and contributed about 42 percent to sales. Higher margins at the segment helped growth.
- All other segments saw a decline in sales.
- For the July-September quarter, the company reported net income of $24.6 million, or 42 cents a share, compared with $64.4 million, or $1.12 cents a share, a year ago. Excluding items, the company earned 83 cents a share.
- Net sales fell about 2 percent to $739.8 million. Analysts on an average were expecting earnings of 64 cents a share on revenue of $761.1 million..