Leggett & Platt’s earnings slip despite higher sales

Though it posted an 11 percent increase in net sales, Leggett & Platt Inc.’s (NYSE: LEG) earnings fell by 3 percent in the second quarter.

The Carthage-based manufacturer of engineered components and products for homes, offices and vehicles reported sales of $1.1 billion and earnings of $85 million, or 63 cents per diluted share, for the three-month period ended June 30, according to a news release.

"As predicted in our first-quarter press release, inflation continued to be a margin headwind in the second quarter, as we were not yet ahead of the pricing lag that we experience with steel cost inflation. This primarily affected margins in our residential and furniture products segments,” company President and CEO Karl Glassman said in the release. “Assuming steel scrap prices continue their recent stability, we expect to see margin improvement in the second half of 2018.”

Second-quarter financial notes:
    •    Residential products, Leggett & Platt’s largest segment, recorded a 7.6 percent increase in sales to $443.5 million.
    •    The company repurchased 1.3 million of its shares for an investment of roughly $53 million.
    •    Company officials reduced 2018 sales guidance to $4.25 billion-$4.35 billion, lower than a previous prediction of $4.3 billion-$4.4 billion.

At the end of June, Leggett & Platt’s assets were $3.6 billion. The company’s 22,000 employees work in 14 business units at 120 manufacturing plants in 18 countries, according to the release.

LEG shares were trading at $43.71 as of 8:53 a.m., compared with a 52-week range of $39.57 to $51.99.