L&P Has Better-Than-Expected 3rd Quarter

Time：2019-11-23 10:56:08    Share：

Diversified manufacturer Leggett & Platt Inc., with headquarters in Carthage, Missouri, reported net sales in the third quarter grew to $1.24 billion, a 14% increase compared with the third quarter of fiscal 2018.

Adjusted earnings per share were $.76 for the quarter, an increase of $.10 compared with the same period of the prior year.

Sales and adjusted EPS surpassed the Zacks Consensus Estimate (Zacks Investment Research) by 2% and 13%, respectively. In addition, cash flow from operations was a strong $213 million, the company said.

Karl Glassman, L&P president and chief executive officer, attributed much of the quarter’s sales increase to the acquisition of Elite Comfort Solutions. “(In addition), sales were stronger in Automotive, U.S. Spring and Work Furniture, but this improvement was more than offset by planned lower volume from business exited in Fashion Bed and Home Furniture and weak trade demand in the Industrial Products segment,” Glassman said.

“While we remain confident in continued strong performance, ongoing disruption in the global market makes it difficult to predict our relative performance with precision,” Glassman said. “Earlier this month, the U.S. Department of Commerce announced final dumping duties on mattresses imported from China that range from 57% to 1,732%. Notably, approximately 90% of Chinese mattresses are now subject to antidumping duties in excess of 160%. 

“We expect the U.S. International Trade Commission to make a final determination in this matter no later than the first week of December. In our U.S. bedding businesses, we continue to see strong demand. U.S. Spring sales dollars were up 6%. Finished mattress units were up 28% in the third quarter, including ECS’s year-over-year growth.”

The company narrowed its full-year sales guidance in range of $4.7 billion to $4.8 billion and raised its EPS guidance in the range of $2.40 to $2.55. 

Total sales in the Furniture Products segment, which includes the Adjustable Bed Group, were down 8%, primarily due to the decision to exit Fashion Bed. Sales in Industrial Products, which includes steel rod and wire, decreased 17% from weak trade demand for steel rod and wire and raw material-related selling price decreases. In Residential Products, which includes bedding components, foam and other bedding-related products, as well as Spuhl AG wire-forming machinery and Global Systems Group, total sales grew 41% — 38% from acquisitions. Total sales in Specialized Products grew 6%, primarily from growth in Automotive.