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Leggett & Platt records $896M first-quarter sales

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Carthage-based Leggett & Platt (NYSE:LEG) posted earnings per diluted share of 30 cents in the first quarter, equal to earnings from continuing operations in first-quarter 2010, according to an April 28 news release.

Sales for the quarter were $896 million, up 10 percent – or $80 million – compared to first-quarter 2010, partly due to same-location sales volume growth in the company’s specialized products and industrial materials segments, though inflation contributed 4 percent of the increase.

Leggett & Platt recorded a net income of $45 million during the quarter, down slightly from earnings of $45.1 million in first-quarter 2010.

The company also:
  • repurchased 5.4 million shares during the first quarter, resulting in a drop to 142.6 million outstanding shares; and
  • ended the first quarter with net debt at 27.5 percent of net capital, below the 30 percent to 40 percent target.
"We are very encouraged to see higher market demand and sales growth during the first quarter,” Leggett & Platt President & CEO David Haffner said in the release. “That growth enhanced earnings but was offset by higher raw material costs, as previously anticipated. We implemented price increases during the quarter in response to cost inflation; as a result, we expect improved margins in subsequent quarters.”

The company has completed the first part of a three-step strategic plan announced in 2007 – divesting low-performing businesses – and has made progress in the second step to improve margins and returns. Now, the company is moving into the third step, aiming for average growth of 4 percent to 5 percent a year.

“For the next couple of years, we expect market recovery to provide growth in excess of our target. Earnings should improve meaningfully as a result of our operating leverage and spare production capacity,” Haffner said in the release. “Longer term, we expect growth to come from commercialization of innovative new products, expansion into potential new growth areas, and normal (gross domestic product)-like growth in our existing markets.”

Leggett & Platt's Board of Directors also declared a first-quarter dividend of 27 cents a share, 1 cent higher than last year’s first-quarter dividend, making 2011 the 40th consecutive annual dividend increase for the company, the release said.

Leggett & Platt manufactures engineered components and products for homes, offices and vehicles.

Company shares were trading at $26.16 as of 10:03 a.m., compared to a 52-week range of $18.83 to $26.95.[[In-content Ad]]

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