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Leggett & Platt nets increased sales, earnings in Q2

CARTHAGE, Mo. — Leggett & Platt posted a 10% increase in second quarter net earnings on a 3% sales increase despite sluggish demand in its end markets, which the components producer said led it to reduce full-year sales and earnings-per-share guidance.

Net earnings for the quarter increased to $71.3 million from $64.9 million for the same period a year ago.

Earnings per share increased 7% to 48 cents from 45 cents, while earnings per share from continuing operations jumped 13% to 44 cent from 39 cents.
Sales from continuing operations for the second quarter increased 3%, or $24 million, to $959 million.

Total sales for its residential furnishings business segment increased 3% to $488.8 million, with higher unit volumes and raw material-related price increases. The company said earnings before interest and income taxes in the segment increased $2 million - again from the higher unit volume as well as "favorable product mix in U.S. spring, and gains from building sales."

The gains were partially offset by margin compression in fabric converting.

In the release, CEO David Haffner noted the company exited three small operations during the quarter, recording an earnings-per-share benefit of 5 cents in discontinued operations. It also completed the acquisition of a small United Kingdom-based metals provider to the aerospace industry.

"We continue to maintain our strong financial base," Haffner said, noting that during the quarter, Leggett & Platt repaid $200 million of long-term debt that came due and had $479 million available under its commercial paper program at the end of the quarter.

The company also purchased 1.2 million share of stock during the period and issued 300,000 shares for a net decrease of 900,000 shares to 141.9 million shares outstanding.

Through the first six months, the company reported net earnings of $120.4 million, up 11% from the same period last year. Net earnings per share increased 8% to 81 cents and earning per share from continuing operations increased 10% to 77 cents.

The company reduced its guidance of annual sales growth, saying it is now looking for an increase between 1% and 4% vs. prior guidance of 2% to 6% growth. Earnings-per-share guidance for continuing operations is now $1.50 to $1.65.

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