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Larry Thomas

Leggett & Platt profits rise 11.6% despite slight sales dip

CARTHAGE, Mo. - Components producer Leggett & Platt said its first-quarter earnings rose 11.6% despite a sales decline of about 1%.

The company attributed the earnings jump to cost improvements and a favorable product mix in certain businesses.

"We are pleased with our start to 2013, and remain optimistic that we will continue to see longer-term benefits from ongoing consumer and housing market recoveries," said David Haffner, CEO, who pointed out that earnings per share increased 10% despite flat unit volume.

He said unusually high accrual for stock-based compensation plans shaved earnings by 3 cents per share. That was largely the result of the company's stock price increasing from $27 per share to about $34 per share during the quarter.

Net sales for the quarter totaled $936 million. That was down from $946.8 million in last year's first quarter.

The company's residential furnishings segment, which includes its furniture and bedding components businesses, recorded a 1.2% drop in sales to $486.6 million, but the segment's earnings before interest and taxes rose 5% to $42.3 million.

Leggett said the lower sales were more than offset by cost improvements, a favorable product mix in its U.S. innerspring business and a $3 million gain from a hurricane insurance claim.

Net income for the quarter totaled $49.1 million or 33 cents per share. That was up from $44 million or 30 cents per share in last year's first quarter.

The company updated its 2013 sales and earnings forecasts by raising the low end of both forecast ranges.

Sales are now projected at $3.8 billion to $3.95 million, up from a January forecast of $3.75 billion to $3.95 billion. Earnings per share are now projected at $1.55 to $1.75, up from the January forecast of $1.50 to $1.75.

In 2012, Leggett recorded earnings of $1.46 per share, excluding a non-cash income tax benefit. Sales were $3.72 billion.

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