Analyst Still Likes Armstrong Stock

New York, NY, Nov. 1, 2011 -- Stifel-Nicolaus has a "buy" rating on the stock of Armstrong World Industries despite weaker than expected third quarter sales.

Stifel cited weaker global vinyl sales as well as difficult conditions in Europe for its ceiling business for the lackluster sales.

Without currency gains, sales were essentially flat.

"While the company did experience volume increases in the U.S. in its ceilings business, the tumult in Europe clearly has impacted business. The company did report volume increases in wood flooring and cabinets which generally counters weak end market conditions," Stifel said.

Armstrong expects sales between $2.85 and $2.9 billion during 2011.

"Cost cutting efforts have been critical to sustaining the earnings growth as volumes have declined and raw material costs have remain elevated," Stifel said in an analyst's report Tuesday.

"Within the segments, we were most impressed with the second consecutive double digit EBIT margin quarter from wood flooring. The company posted growth in wood flooring of 6% and showed a 13.6% EBIT margin for the quarter.

"We believe industry wood shipments were negative in the quarter and that these results represent meaningful share gains."