Leggett & Platt Posts Record Earnings, Misses Esti

Carthage-Mo, July 22--Leggett & Platt Inc. turned in record earnings in the second-quarter, but sales fell short of expectations. The company reported net earnings of $79.2 million, or $0.41 per share for the three months ended June 30, up from $76.8 million, or $0.39 per share, a year ago. Revenue for the quarter rose 2.5% to $1.31 billion from $1.28 billion a year earlier. Analysts were expecting the company to earn $0.43 per share on revenue of $1.36 billion. "Sales and EPS were the highest we've ever attained for the second quarter of any year. Earnings were within our guidance, but sales were slightly below the range we originally forecasted," chairman and CEO Felix Wright said in a statement. An unanticipated drop in prices for some of its products and customers switching to cheaper brands to offset inflation were two key factors cited by the company for the weaker sales numbers. The result was a drop in same-location sales growth, which rose 8% in the first quarter but slowed in the second quarter to just 2%. The company said it anticipates same-location sales in the third quarter to only match year-ago numbers. One area that's been struggling is bedding. Leggett & Platt is a major manufacturer of mattress components. "Domestic bedding components volume declined year-over-year, but improved sequentially, and showed less decline ... than we saw in the first quarter. We expect to see significant promotional activity by bedding retailers during the third quarter." Leggett & Platt's other business segments looked a bit more robust, led by a 6% sales increase in commercial fixtures and components. Aluminum products sales rose 5% from a year ago, residential furnishings were up 3%, and industrial materials posted a 2% revenue gain. But the specialized products division, which caters heavily to the automotive industry, saw sales fall 3% overall. Despite the second-quarter slowdown, the company said it expects to achieve sales growth on the order of 3% to 5% for the full year based on equal contributions from acquisitions and same-location sales. The company narrowed its full-year profit target to $1.55 to $1.65 a share from the $1.50 to $1.70 range it provided earlier. For the third quarter, the company said it anticipates trade sales of $1.34 billion to $1.39 billion, which will leave it with a profit of 42 cents to 47 cents a share.