Leggett & Platt Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Leggett & Platt, Inc. (NYSE:LEG) will unveil its latest earnings on Monday, October 29, 2012. Leggett & Platt manufactures a range of engineered components and products, including residential furnishings, commercial fixtures and components, and industrial materials.

Leggett & Platt, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 38 cents per share, a rise of 22.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 37 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 38 cents during the last month. Analysts are projecting profit to rise by 25% compared to last year’s $1.40.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the second quarter, it reported profit of 39 cents per share against a mean estimate of net income of 36 cents per share. In the first quarter, it missed forecasts by 2 cents.

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A Look Back: In the second quarter, profit rose 18.6% to $64.9 million (45 cents a share) from $54.7 million (37 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 0.7% to $938.8 million from $945.2 million.

Stock Price Performance: Between July 30, 2012 and October 23, 2012, the stock price rose $2.61 (11.4%), from $22.97 to $25.58. The stock price saw one of its best stretches over the last year between December 14, 2011 and December 27, 2011, when shares rose for nine straight days, increasing 10.9% (+$2.34) over that span. It saw one of its worst periods between May 1, 2012 and May 9, 2012 when shares fell for seven straight days, dropping 5.9% (-$1.29) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.59 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.16 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 40.7% to $880.8 million while assets rose 3.7% to $1.4 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 8.6% in the third quarter of the last fiscal year, 6.5% in the fourth quarter of the last fiscal year and 5.7%in the first quarter before dropping in the second quarter.

Last quarter’s earnings rise was a switch from preceding drops, so the upcoming earnings announcement is a chance to build on last quarter’s result. Net income fell in the third quarter of the last fiscal year, the fourth quarter of the last fiscal year and the first quarter before snapping that run with a profit increase in the second quarter.

Wall St. Revenue Expectations: Analysts are projecting a rise of 4.3% in revenue from the year-earlier quarter to $980.9 million.

Analyst Ratings: With three analysts rating the stock as a buy, none rating it as a sell and three rating it as a hold, there are indications of a bullish outlook.

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

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