Leggett & Platt profits increase while sales decline

Leggett shares (NYSE: LEG) were trading at $23.40 at 10:30 a.m., down 75 cents from Thursday’s close. The 52-week range is $21.93 to $27.04.

The company released its fourth-quarter 2006 results after the market closed Thursday afternoon. Leggett reported fourth-quarter sales of $1.31 billion, a 2.2 percent decrease compared to the same period in 2005, and earnings per share of 38 cents, including 5 cents in nonrecurring income.

“Fourth-quarter sales and earnings were in line with the expectations we shared in October, even though sales were toward the lower end of our guidance,” President and CEO David Haffner said in the earnings release. “Operationally, we are progressing as expected.”

The Fortune 500 member delivered record full-year revenues of $5.51 billion, an increase of 3.9 percent compared to 2005, and record full-year earnings per share of $1.61, including 5 cents in nonrecurring income.

Haffner said Leggett’s 2006 accomplishments included completing the restructuring that began in 2005, filling several new business development and product development positions, increasing the dividend and repurchasing 3 percent of the company’s outstanding shares.

In its 2007 guidance, Leggett predicts earnings per share between $1.65 and $1.85 with sales growth of about 2 percent, and first-quarter earnings per share of 31 to 35 cents with a sales decrease of about 3 percent compared to the first quarter of 2006.

“We continue to have a strong balance sheet, and plenty of cash to fund the growth we contemplate,” Haffner said in the release. “Over the past five years we’ve generated over $2 billion of cash from operating activity. For the near future, after funding maintenance capital and dividends, we expect annually to have $400 (million) to $450 million of cash available for investment in growth initiatives. Unused cash flow, if any, is anticipated to be spent on stock repurchase.”

Leggett completed two acquisitions in the fourth quarter for a total of five during the year. The new properties are expected to add about $75 million to annual revenue.[[In-content Ad]]