Unpacking Q3 Earnings: Armstrong World (NYSE:AWI) In The Context Of Other Building Materials Stocks

November 13, 2024 at 05:43 AM EST

AWI Cover Image

Looking back on building materials stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Armstrong World (NYSE: AWI) and its peers.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 8 building materials stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 1.2% above.

Thankfully, share prices of the companies have been resilient as they are up 7.9% on average since the latest earnings results.

Armstrong World (NYSE: AWI)

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.

Armstrong World reported revenues of $386.6 million, up 11.3% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with optimistic earnings guidance for the next quarter.

“With another quarter of record setting sales and strong earnings growth, we continue to demonstrate our ability to deliver growth despite muted market conditions through operational execution and our investments in strategic acquisitions, innovation and digital initiatives,” said Vic Grizzle, President and CEO of Armstrong World Industries.

Interestingly, the stock is up 13.6% since reporting and currently trades at $156.

Is now the time to buy Armstrong World? Access our full analysis of the earnings results here, it’s free.

Best Q3: Tecnoglass (NYSE: TGLS)

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Tecnoglass reported revenues of $238.3 million, up 13.1% year on year, in line with analysts’ expectations. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and optimistic EBITDA guidance for the full year.

The market seems happy with the results as the stock is up 5.3% since reporting. It currently trades at $73.94.

Is now the time to buy Tecnoglass? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: UFP (NASDAQ: UFPI)

Beginning as a lumber supplier in the 1950s, UFP (NASDAQ: UFPI) makes a wide range of building materials for the construction, retail, and industrial sectors

UFP reported revenues of $1.65 billion, down 9.8% year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted a miss of analysts’ EBITDA estimates.

UFP delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 2.2% since the results and currently trades at $134.53.

Read our full analysis of UFP’s results here.

Resideo (NYSE: REZI)

Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.

Resideo reported revenues of $1.83 billion, up 17.6% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ earnings estimates.

Resideo delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 14.9% since reporting and currently trades at $24.96.

Read our full, actionable report on Resideo here, it’s free.

Carlisle (NYSE: CSL)

Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.

Carlisle reported revenues of $1.33 billion, up 5.9% year on year. This number missed analysts’ expectations by 3.3%. Overall, it was a softer quarter as it also logged a miss of analysts’ organic revenue and EBITDA estimates.

The stock is flat since reporting and currently trades at $456.01.

Read our full, actionable report on Carlisle here, it’s free.

Market Update

As expected, the Federal Reserve cut its policy rate by 25bps (a quarter of a percent) in November 2024 after Donald Trump triumphed in the US Presidential election. This marks the central bank's second easing of monetary policy after a large 50bps rate cut two months earlier. Going forward, the markets will debate whether these rate cuts (and more potential ones in 2025) are perfect timing to support the economy or a bit too late for a macro that has already cooled too much. Adding to the degree of difficulty is a new Republican administration that could make large changes to corporate taxes and prior efforts such as the Inflation Reduction Act.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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