Leggett & Platt, Incorporated (LEG - Free Report) reported third-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate. The bottom line surpassed the consensus mark for the second straight quarter. The company also raised its 2019 earnings view. Following robust results and an upbeat view, the company’s shares increased 2.1% in after-hour trading session on Oct 28.
Adjusted earnings of 76 cents per share beat the Zacks Consensus Estimate of 67 cents by 13%. The figure rose from the year-ago quarter’s profit level of 66 cents by 15.2%. Strong sales in Automotive, U.S. Spring and Work Furniture added drove the upside. Also, contributions from the Elite Comfort Solutions (ECS) acquisition as well as continued market share and content gains in U.S. Spring led to the upside.
However, lower volume from businesses exited in the Fashion Bed and Home Furniture along with weak trade in the Industrial Products segment partly offset the positives.
Quarter in Details
The company’s net sales of $1,239.3 million beat the consensus mark of $1,215 million by 2% and increased 13.5% from the prior-year quarter’s level. The improvement was primarily driven by solid contribution from the ECS acquisition. Leggett also benefited from ongoing market share and content gains in U.S. Spring (up 6%). However, the positives were partly offset by lower volumes arising from its decision to exit businesses in the Fashion Bed and Home Furniture Products segment along with weak trade demand in the Industrial Products.
Volumes declined 1% in the quarter versus 3% growth reported in the year-ago quarter. Organically, sales dropped 2% in the quarter against 6% growth in third-quarter 2018. That said, minor acquisitions contributed 16% to sales in the quarter. Raw material-related selling prices and negative currency impact lowered sales by 1%.
The company’s overall gross margin expanded 140 basis points (bps) to 22.2% in the quarter. Adjusted EBIT margin also advanced 50 bps to 11.9%, primarily due to lower raw material costs (including LIFO benefit) and improved earnings performance in Furniture Products. Also, the ECS acquisition added to the positives.
Adjusted EBITDA margin surged 130 bps year over year to 15.8% in the quarter.
Leggett & Platt, Incorporated Price, Consensus and EPS Surprise