Industry supplier Leggett & Platt Inc., with headquarters in Carthage, Missouri, reported 2016 third-quarter net income of $93.6 million, a 2.6% dip compared with the third quarter of 2015.
Third-quarter earnings per share from continuing operations were flat at $0.67, yet beat analysts’ expectations of $0.62, according to Zacks Investment Research. Revenue declined 6% to $949 million.
At the conclusion of the quarter, the company raised its full-year earnings guidance to a record EPS on continuing operations of $2.55 to $2.62. The prior range was $2.45 to 2.60.
“Third-quarter earnings and EBIT (earnings before interest and tax) margin were stronger than we forecast, despite softer than expected sales,” said Karl Glassman, president and chief executive officer. “In July, we assumed that the second quarter’s steel inflation would hold through the remainder of the year. Instead, market prices for steel began to deflate. Given third-quarter results and lower current commodity costs, we have increased our 2016 EPS guidance on lower sales. …Regarding our long-term growth expectations, we believe the macro environment will support modest revenue growth in our end markets over the next few years.”
Sales in the Commercial Products Segment, which includes adjustable beds and the Fashion Bed Group, were $164.3 million, a 4% decrease compared with the third quarter of 2015. Increases in the Work Furniture unit were more than offset by lower sales in Adjustable Bed, Leggett & Platt said.
In the Industrial Materials Segment, which includes steel rod and wire, total sales were $144.7 million, representing a 24% decrease, largely due to divestitures. Additionally, same-location sales declined 8% from a combination of steel-related price decreases and lower unit volume in Drawn Wire, the company said.
Third-quarter sales in the Residential Furnishings Segment, which includes bedding components, foam, other bedding-related products and Spuhl AG wire-forming machinery, were $490.2 million, a 7.5% dip compared with the prior-year quarter.
In the Specialized Products Segment, which includes Global Systems Group, sales grew 3% to $247.5 million. Same-location sales rose 6% from continued strength in the Automotive Unit, and EBIT for the segment grew by $5 million due to higher unit volume and currency benefits, the company said.
L&P declared a $0.34 quarterly dividend, representing a 6% increase compared with last year’s third-quarter dividend. The amount marked the company’s 45th consecutive annual dividend increase. The company said it is proud of its dividend record and plans to continue it.
In the third quarter, the company repurchased 0.5 million shares of its stock at an average price of $52.77 and issued 0.8 million shares, primarily via employee stock option exercises. At the close of the quarter, there were 133.7 million shares outstanding, representing a 1.8% reduction over the prior 12 months.