Armstrong Blames Loss on Flooring Decline
Armstrong World Industries Inc is blaming a net loss in the fourth quarter of last year on a decline in the flooring industry in North America. The company says that the rising cost of lumber, coupled with a fall in both the construction of new homes and the remodelling of old ones – including wood floor restoration projects – is the root cause of the net loss of twenty one million US dollars, a major loss compared to a net loss of just under four million at the close of the corresponding period of 2009. As a result, shares in the company on Wall Street also fell by over three percent.
Volume fell by about two and a half percent in the last quarter of last year, which Armstrong blames on the increase in the cost of lumber. “Volume losses were especially significant in our Wood Flooring segment,” the company admitted in a statement, which was released on Monday. “Sales were down eleven percent despite modest mix and price improvements.” Armstrong World Industries Inc says that the cost to its Wood Floor segment due to the rising price of lumber was an additional twenty million extra in expenditure.
Armstrong experienced a big drop in net income in 2010, down to just eleven million from over seventy-seven and a half million the year before, with full revenue down by somewhat less, at around just half a per cent. The company says it expects the current market to remain flat this year.