Leggett & Platt Earnings: Beats the Street on Profit Rise

S&P 500 (NYSE:SPY) component Leggett & Platt Inc. (NYSE:LEG) reported net income above Wall Street’s expectations for the second quarter. Leggett & Platt manufactures a range of engineered components and products, including residential furnishings, commercial fixtures and components, and industrial materials.

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Leggett & Platt Inc. Earnings Cheat Sheet

Results: Net income for Leggett & Platt Inc. rose to $64.9 million (45 cents per share) vs. $54.7 million (37 cents per share) in the same quarter a year earlier. This marks a rise of 18.6% from the year-earlier quarter.

Revenue: Fell 0.7% to $938.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Leggett & Platt Inc. beat the mean analyst estimate of 36 cents per share. It fell short of the average revenue estimate of $978.9 million.

Quoting Management: President and CEO David S. Haffner commented, “We are pleased with the progress we continue to make. Second quarter EBIT margin increased from 8.4% last year to 9.2% for 2012. EBIT improved as a result of unit volume growth in certain businesses, our fourth quarter 2011 restructuring activity, and the Western Tube acquisition. We increased our full year EPS guidance to reflect the positive effect of second quarter’s unusual items and improved margins.”

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 8.6%.

Last quarter’s profit increase ends a three-quarter streak of profit decreases. In the first quarter, net income fell 2.2% from the year earlier, while the figure dropped 72.3% in the fourth quarter of the last fiscal year and 5.3% in the third quarter of the last fiscal year.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 30 cents versus a mean estimate of net income of 32 cents per share.

Margins were up in the first quarter, following a drop in the previous quarter. Gross margins grew to 19.9%, up 0.7 percentage point from the year-earlier quarter. In the fourth quarter of the last fiscal year, the figure rose 0.1 percentage point to 18.8% from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from 35 cents a share to 37 cents over the last ninety days. The average estimate hasn’t changed from $1.31 per share for the fiscal year.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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