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

Posted: 2/6/2014 7:00:00 AM
Referenced Stocks: LEG

Leggett's bottom line continues with its impressive performance in the final quarter of 2014 as well on the back of enhanced sales and lower LIFO expenses. Further, the company hopes to generate greater sales, achieve higher operating margin and deliver record earnings in 2015. 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 undertake profitable ventures and return value to shareholders. Further, the company's sustained focus on launching new products and divesting non-performing businesses bode well for its growth. Therefore, we retain our long-term Outperform 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 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 fiscal 2014, this segment contributed approximately 53% 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 fiscal 2014, this segment contributed nearly 21% to sales.

Industrial Materials segment produces and provides steel rods, drawn steel wires, steel billets and welded steel tubing to its customers. In fiscal 2014, this segment contributed about 21% 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 fiscal 2014, this segment contributed approximately 5% to revenues.

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