Armstrong World Industries posts 2Q net income drop of 5.3 percent, but revenue grows

Armstrong World Industries 2Q net income falls

LANCASTER, Pa. — Armstrong World Industries Inc. posted a 5.3 percent drop in its profit for the second quarter, but the flooring and building products maker said revenue grew and cuts in operating costs helped offset the impact of higher lumber prices.

Adjusted results still topped Wall Street’s expectations and the company boosted its outlook for the year.

Its shares rose 38 cents to $36.90 in midday trading.

The slump in the U.S. housing market has been hurting business for Armstrong, which supplies products for new homes and renovations.

The company said most of its key markets are still expected to decline. It expects the North American and European commercial markets to fall about 5 percent his year, while North American residential markets should be flat to down modestly.

The company reported net income fell to $26.8 million, or 46 cents per share in the three-month period ending June 30, from $28.3 million, or 50 cents per share, a year earlier.

Excluding one-time charges, the company earned $32.4 million, or 56 cents per share.

Analysts expected earnings of 46 cents per share on revenue of $702.7 million, according to Thomson Reuters. The earnings estimates normally exclude one-time items.

Revenue rose 2.7 percent to $724.8 million from $705.7 million.

Volumes around the world rose 2 percent, with international business offsetting domestic declines.

The company expects revenue of $2.7 billion to $2.85 billion, and adjusted earnings per share to be $1.55 to $1.75. That’s up from a range of $1.35 to $1.60 it announced in May during its first quarter release.

Analysts expect the company to earn $1.63 per share in fiscal 2010, according to Thomson.