Leggett & Platt Incorporated (LEG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
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.

Overview:

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 segments:

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 total 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 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% to 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 third quarter, this segment contributed approximately 5% to revenues.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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