Armstrong cuts 2012 outlook as economy worsens

LANCASTER, Pa. (AP) ? Armstrong World Industries Inc.'s second-quarter net income rose 10 percent on cost cuts, but the company cut its outlook for the year, citing weakening growth in the U.S. and the worsening economy in Europe.

The company, which makes floors and ceilings, said it expects less opportunity for residential and commercial remodelings.

Armstrong is aiming to cut costs as revenue declines and boosted long-term plan to cut costs by $15 million to $200 million. For this year, it now expects to save $50 million rather than $35 million.

A slowing economy may hurt demand in the construction and real estate industries. Armstrong's annual revenue has not recovered from its 2007 level, before the worst of the Great Recession hit.

In the three months ended June 30, Armstrong earned $41.8 million, or 70 cents per share, from $37.9 million, or 64 cents per share, a year ago. The Lancaster, Pa., company credited lower manufacturing costs, selling and general expenses and higher prices for helping profit despite volume declines in all its businesses and regions.

The stronger dollar also hurt results. A rising dollar cuts into income earned in foreign currencies when it's translated back into the dollar.

Profit adjusted for one-time items was 71 cents per share. Revenue dropped 5 percent to $709.9 million from $748.6 million on the stronger dollar and volume declines.

That fell far short of Wall Street expectations. Analysts polled by FactSet expected earnings of 78 cents per share on $765.4 million in revenue.

In the current quarter, Armstrong anticipates revenue of $740 million to $780 million, below Wall Street's expectation of $803.3 million.

The company also cut its outlook for the full year to below analyst predictions.

Armstrong predicts earnings of $2.40 to $2.70 per share, excluding one-time items, in 2012, down from its previous estimate of $2.65 to $3.05 per share. Analysts expect profit of $2.72 per share.

The company also cut its 2012 revenue guidance to $2.75 to $2.85 billion from a prediction earlier this year of $2.9 billion to $3 billion. Analysts expect $2.92 billion.

Source: http://news.yahoo.com/armstrong-cuts-2012-outlook-economy-worsens-131817795--finance.html

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