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Steelcase Profit Tops Estimate - Update

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Office furniture maker Steelcase Inc. (SCS: Quote), Wednesday reported a higher profit in the third quarter, on increased revenues in the Americas, while Europe, Middle East and other regions declined. Both earnings and revenues for the quarter topped Wall Street estimates.

Steelcase makes furniture and interior architectural products. The company saw a 3 percent growth in the Americas that accounts for most its sales. Europe, Middle East and Africa region were down 2.9 percent, and other regions slid 3.2 percent.

"We were pleased that the Americas expanded their adjusted operating margin by 110 basis points in the third quarter compared to the prior year, despite modest revenue growth," said CEO James Hackett.

The company is intent on improving performance in the EMEA segment as demand patterns remain mixed and a higher mix of lower-margin project business.

Steelcase posted third-quarter revenues of $727 million, up from $719 million last year. Analysts on consensus estimated revenues of $722.10 million for the quarter.

Organic revenue growth was 1 percent after adjusting for $8 million of unfavorable currency translation effects and a favorable impact of $6 million from dealer acquisitions.

The Grand Rapids, Michigan-based company reported quarterly net income of $23.6 million or $0.18 per share, compared with $22.4 million or $0.17 per share last year.

Excluding items, adjusted earnings for the quarter were $0.22 per share. Analysts estimated earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude one-time items.

For the fourth quarter, Steelcase expects net earnings of $0.14 to $0.18 per share and revenues of $695 million to $720 million. Analysts currently expect earnings of $0.19 per share on revenues of $708.70 million.

The company's earnings outlook includes two cents per share of restructuring costs.

SCS closed Wednesday at $11.53, up 0.26%, on a volume of 1.3 million shares on the NYSE. In after hours, the stock dropped 0.13%.

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by RTT Staff Writer

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