Leggett & Platt earnings drop 12.7% despite 6% sales gain
Accounting expense, higher raw materials costs are factors
Larry Thomas -- Furniture Today, October 22, 2010
CARTHAGE, Mo. - Leggett & Platt, a key supplier of furniture and bedding components, said third-quarter sales were 7% above last year's third quarter, but net income dropped 12.7% due to an accounting expense and higher raw materials costs.
Worldwide sales totaled $866.5 million, up from $809.9 million in the same quarter last year. Sales from its residential furnishings segment were $442.1 million in the most recent quarter, compared with $441.1 million in last year's third quarter.
David Haffner, president and CEO said several markets within the residential furnishings segment "weakened noticeably" during the quarter, even though unit volume was up 6%. In the first half of 2010, unit volume had risen 15%.
"We believe the stronger consumer demand during the first half of the year was driven, in part, by larger income tax refunds and house purchase incentives," Haffner said.
Net income for the quarter totaled $47.4 million or 31 cents per share. That's down from $54.3 million or 34 cents per share in the same quarter last year.
"Raw material costs temporarily increased beyond the amounts anticipated when we implemented price increases during the second quarter; however, we are seeing costs begin to retreat to expected levels," Haffner said.
For the first nine months of 2010, sales rose 11.9% to $2.56 billion. Nine-month earnings were $145.2 million or 94 cents per share. That was nearly double the profit of $76.6 million or 48 cents per share in the first nine months of 2009.
The company is projecting full-year earnings at $1.10 to $1.20 per share. That's at the lower end of the $1.10 to $1.30 per share range projected in July.
Sales for the year are projected to be $3.3 billion to $3.35 billion. The July projection was $3.2 billion to $3.4 billion.
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