LANCASTER, PA - Armstrong World Industries, Inc. (NYSE: AWI) third quarter earnings rose 5% to $729.7 million, the increase driven primarily by residential wood flooring sales. 

But the bottom line fell out on rising lumber costs, says CEO Matt Espe, with net income plunging 24.5% to $55.9 million.

Overall sales fell $7 million against year ago levels, due to the sale of the Patriot wood flooring distribution business in the third quarter of 2012. Armstrong sold that flooring sales operation at the end of last year to Belknap White Group.

Rising lumber costs increased expenses, as did investments to support emerging market and architectural specialties growth initiatives and higher labor costs associated with added crews at several solid wood plants to respond to increased demand. T

 "Commercial construction activity was mostly flat in the third quarter and sales came in slightly below our guidance range as we experienced weaker than expected global demand for our products," said Espe.

In October 2012, Armstrong sold its cabinetry business to American Industrial Partners (AIP).