Leggett's (LEG) Stock Down 1.7% On Q1 Earnings & Sales Miss
Zacks Investment Research | Apr 29, 2019 11:27PM ET
Leggett & Platt Inc.’s (NYSE:LEG) shares dropped 1.7% after it reported lower-than-expected earnings in the first quarter of 2019. Adjusted earnings of 49 cents per share missed the Zacks Consensus Estimate of 52 cents by 5.8%. Also, the said figure decreased 14% from the year-ago level of 57 cents. Its quarterly performance was impacted by declines in Automotive, Fashion Bed, Flooring Products and Adjustable Bed.
Delving Deeper
The company’s net sales of $1,155.1 million missed the consensus mark of $1,184 million by 2.4% but increased 12% from the prior-year level of $1,028.8 million. The uptrend was primarily driven by its recently completed ECS acquisition. It also benefited from ongoing market share and content gains in U.S. Spring and pricing actions in steel-related businesses. However, the positives were partly offset by its decision to exit Fashion Bed and Home Furniture businesses, exchange rate impact, alongside softer demand in Automotive.
Volumes declined 3% in the quarter versus 1% decline recorded in the year-ago period. Organically, sales decreased 1% in the quarter against 6% growth in first-quarter 2018. That said, smaller acquisitions contributed 13% to sales. Raw material-related selling price increased 4%, which was partially offset by a negative currency impact of 2%.
The company’s overall gross margin contracted 90 basis points (bps) to 20.2% in the quarter.
Adjusted EBIT margin also declined 130 bps to 9.1%. Improved metal margins at the steel rod mill and earnings attributable to the ECS acquisition were more than offset by declines in Automotive, Fashion Bed, Flooring Products, and Adjustable Bed.
Leggett & Platt, Incorporated Price, Consensus and EPS Surprise
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