Leggett reported better-than-expected bottom line results for
second-quarter 2014 backed by enhanced sales coupled with a lower
tax rate and share count. We commend Leggett's consistent endeavors
to keep itself on the growth trajectory through acquisitions that
would augment its top-line performance over the long term. We are
also impressed by the company's strong financial base that enables
it to make profitable ventures and return value to shareholders.
The company's sustained focus on launching new products and
divesting non-performing businesses bode well for its growth.
However, we are concerned about the rising raw material costs,
which have adversely impacted the company's margins over the past
few quarters. Intense competition from global and regional players
as well as exposure to foreign exchange rates may be other
deterrents. Thus, we are maintaining our long-term Neutral
recommendation on the stock.
Headquartered in Carthage, MO, Leggett and Platt Inc. is a
global manufacturer that conceives, designs, and produces a wide
variety of engineered components and products found in many homes,
offices, retail stores, and automobiles. The company's most
important product lines include components for residential
furniture and bedding, retail store fixtures and point of purchase
displays, as well as office furniture. In addition, Leggett makes
non-automotive aluminum dye castings, drawn wire steel, automotive
seat and lumber systems, as well as bedding industry machinery. The
company has 130 production facilities located in 18 countries. The
company reports its operating results under the following
Residential Furnishings manufactures a range of components used
by bedding and upholstered furniture manufacturers in their
finished products. This division also supplies carpet cushions,
adjustable beds, ornamental beds and geo components. In
second-quarter 2014, this segment contributed approximately 49% to
total external sales.
Specialized Products division produces lumber systems and wire
components used by automotive seating manufactures. This segment
also manufactures racks, and shelving and cabinets used to outfit
service vans. In the quarter, this segment contributed nearly 21%
to external sales.
Industrial Materials segment produces and provides steel rods,
drawn steel wires, steel billets and welded steel tubing to its
customers. In the second quarter, this segment contributed about
21% to external sales.
Commercial Fixturing & Components segment manufactures
retail store fixtures and point of purchase displays. The segment
also produces chair controls, bases and other components for office
furniture manufacturers. In the last reported quarter, this segment
contributed approximately 9% to external revenues.
Leggett & Platt Incorporated (LEG): Read the
Full Research Report
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
LEGGETT & PLATT (LEG): Free Stock Analysis
To read this article on Zacks.com click here.