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Steelcase Profit Rises; Stock Down As Outlook Disappoints - Update

Steelcase Inc. (SCS) Thursday reported an increase in profit for the fourth quarter, due mainly on strong revenue growth in the Americas, partly offset by a higher spend on product development and other initiatives. Revenue for the quarter topped Street estimates.

Looking ahead, Steelcase provided its outlook for the first quarter 2013 that failed to impress investors, sending its shares down nearly 13 percent in after-hours trade on the New York Stock Exchange.

Steelcase provides furniture systems and seating products, as also interior architectural services. Revenue for the fourth quarter was up 10.8 percent, compared to last year. On an organic basis, revenue grew 10 percent.

Americas, the biggest business region, grew 17.2 percent from a year ago, partly reflecting a higher mix of project revenue from some large corporate customers. EMEA revenue edged up 1.6 percent.

"The Americas had another great quarter, achieving double digit organic revenue growth for the sixth consecutive quarter," said CEO James Hackett.

"Fourth quarter orders and backlog in the Americas remained strong and as a result, we expect the sales momentum to continue into the first quarter of fiscal 2013," added Hackett.

Steelcase earned $15 million or $0.11 per share in the fourth quarter, compared to $10.4 million or $0.08 per share last year.

Excluding items, adjusted earnings were $0.14 per share for the quarter.

On average, four analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Grand Rapid, Michigan-based Steelcase recorded revenue of $690 million, compared to $623 million last year. Analysts expected revenue of $688.77 million for the quarter.

Steelcase expects first-quarter 2013 earnings in the range of $0.08 to $0.12 per share, including restructuring costs of about $0.02 per share. Revenue is anticipated to be between $665 and $690 million.

Analysts currently expect earnings of $0.16 per share and revenue of $670.80 million for the first quarter.

The company said the earnings outlook reflects its expectation for a continuation of costs associated with the consolidation of manufacturing facilities.

Steelcase also declared a cash dividend of $0.09 per share, an increase of 50 percent compared to the dividend for the prior quarter. The dividend will be payable on or before April 11 to shareholders as of April 2.

SCS closed Thursday at $9.29, up $0.08 or 0.87%, on the NYSE. In after hours, the stock slid $0.33 or 3.55%.

by RTTNews Staff Writer

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