Benzinga | Feb 22, 2021 10:13AM EST

Earnings Preview: Armstrong World Indus

On Tuesday, February 23, Armstrong World Indus (NYSE:AWI) will release its latest earnings report. Benzinga's outlook for Armstrong World Indus is included in the following report.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, Armstrong World Indus analysts model for earnings of $0.67 per share on sales of $231.00 million. Armstrong World Indus reported a profit of $1.11 per share when it published results during the same quarter last year. Sales in that period totaled $246.90 million.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Tuesday, earnings would be down 39.64%. Sales would be down 6.44% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 0.93 0.92 1.11 0.86EPS Actual 1.07 0.75 1.10 1.11Revenue Estimate 228.30 M 223.03 M 250.71 M 256.29 MRevenue Actual 246.30 M 203.20 M 248.70 M 246.90 M

Stock Performance

Shares of Armstrong World Indus were trading at $78.12 as of February 19. Over the last 52-week period, shares are down 27.83%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Armstrong World Indus is scheduled to hold the call at 11:00:00 ET and can be accessed here.