What To Expect From Armstrong Flooring's (AFI) Q3 Earnings?

Armstrong Flooring, Inc. (NYSE:AFI) is slated to report third-quarter 2018 results on Nov 5, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 80.8%. In fact, earnings of Armstrong Flooring, which shares space in the Zacks Wood industry with Vulcan Materials Company (NYSE:LEG) , Louisiana-Pacific Corporation (NYSE:LPX) and Weyerhaeuser Company (NYSE:WY) , topped expectation in three of the last four quarters, resulting in an average of 29.2%.

How are Estimates Faring?

Let’s take a look at the estimate revision trend in order to get a clear picture of what analysts are thinking about the company prior to the earnings release. For the quarter to be reported, the Zacks Consensus Estimate is pegged at 32 cents, remaining stable over the past 30 days. Nonetheless, this reflects a solid gain of 60% from 20 cents per share reported in the year-ago quarter. Revenues are expected to be $310.4 million, up 0.6% year over year.

Factors That Might Influence Upcoming Results

Armstrong Flooring’s third-quarter results are likely to benefit from higher revenues, resulting from volume growth in Luxury Vinyl Tile or “LVT” business and strong pricing in most product categories. The company also prioritized growth plans including LVT leadership, innovation, share of wallet with distributors, wood profit enhancements and revitalization of its legacy categories. These combined efforts are likely to lend Armstrong Flooring a competitive edge over peers and drive transformative growth from the level it had demonstrated in the first half of 2018.

Armstrong Flooring remains on track with its various initiatives to improve efficiency, which are poised to strengthen its position as the leader in hard surface flooring.

Meanwhile, the company has also been undertaking cost-saving initiatives that are expected to boost its bottom line in the to-be-reported quarter. However, resilient raw materials and freight inflation remain a cause of concern. Lumber and other input costs are expected to remain considerable headwinds through the remaining of the year.

The company expects that growth and margin improvement in the second half will be more heavily weighted toward the fourth quarter, as it focuses on higher growth categories, product innovation and strengthened distribution partnerships.

What Our Model Indicates

Our proven model does not show that Armstrong Flooring is likely to beat earnings estimates in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of 0.00% and a Zacks Rank #2, making surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

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