Tuesday, Armstrong World Industries, Inc. (AWI), a manufacturer of flooring and ceiling products, said its third quarter profit increased from last year as a 19% drop in sales was offset by an income tax benefit. The company expects fiscal 2009 results above the current estimates of Wall Street analysts.
The Lancaster, Pennsylvania-based company's third-quarter net earnings increased to $64.4 million or $1.12 per share from $38.9 million or $0.68 per share a year ago. Reported income from continuing operations rose to $64.4 million or $1.12 per share from $39.1 million or $0.68 per share in the third quarter of 2008.
On a non-GAAP basis, income from continuing operations decreased to $43.2 million or $0.75 per share from $48.9 million or $0.86 per share in the year-earlier period.
Third quarter results included $46 million as non-cash tax benefit for adjustments related to the July 2009 IRS approval of 10-year carry-back refund.
On average, six analysts polled by Thomson Reuters estimated earnings of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the third quarter decreased 19% to $753.0 million from $929.6 million in the same period of 2008. Excluding the impact of foreign exchange rates, revenue decreased 17%. Analysts expected revenues of $732.32 million for the quarter.
Operating income from continuing operations declined to $44.0 million from $82.2 million in the third quarter of 2008.
The company had an income tax benefit of $24.6 million in the third quarter, compared to an income tax expense of $36.9 million in the prior-year quarter.
Segment wise, net sales of resilient flooring eased to $282.6 million from $336.9 million in the same period of 2008. Wood flooring net sales fell by 18% to $140.1 million from $171.0 million due to continued declines in residential housing markets. Building products net sales slid to $292.1 million from $374.1 million in the prior year's quarter. Sales of cabinets dropped by 20% to $38.2 million from $47.6 million.
For the nine-month period, earnings from continuing operations were $81.5 million or $1.43 per share, compared to $106.6 million or $1.87 per share in the first nine months of 2008. Net sales decreased to $2.13 billion from $2.68 billion in the year-earlier period.
Looking forward to fiscal 2009, the company reaffirmed its sales outlook between $2.75 billion and $2.8 billion. Adjusted earnings per share is expected to range from $1.34 to $1.41 per share, compared to $2.37 per share in 2008. Analysts currently expect earnings of $1.12 per share on revenues of $2.72 billion for fiscal 2009.
AWI closed Tuesday's regular trading at $38.15, down $1.32 or 3.34%, on a volume of 1.22 million shares on the New York Stock Exchange.
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