We have upgraded our long-term recommendation on Leggett to
Outperform based on its better-than-expected third-quarter 2014
bottom-line performance and upbeat 2014 earnings guidance. The
company posted strong results in the quarter backed by enhanced
sales coupled with a lower tax rate and share count. Moreover, the
company raised the lower end of its adjusted earnings forecast for
2014. 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 with
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.
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
third-quarter 2014, this segment contributed approximately 55% to
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 third quarter, this segment contributed nearly
20% to sales.
Industrial Materials segment produces and provides steel rods,
drawn steel wires, steel billets and welded steel tubing to its
customers. In the third quarter, this segment contributed about 20%
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 third quarter, this segment
contributed approximately 5% to revenues.
Leggett & Platt Incorporated (LEG): Read the
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