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Leggett & Platt posts lower Q2 profit
18 Jul '08
5 min read
"In contrast to these positive developments, second quarter results for the Commercial segment are disappointing. The Store Fixtures business unit is working diligently to meet our required expectations for improved performance, in spite of extremely difficult market conditions and retailers' hesitancy to make capital investments in this environment. We are aiming for returns in this business unit of at least cost of capital levels by the fourth quarter of 2008. Third quarter is the seasonally strongest quarter for this unit, and will be critical in our evaluation of progress toward the return target.
"Despite external economic challenges, we feel very comfortable with our strategic direction and the initiatives we unveiled last November. We are absolutely committed to the continued execution of our plan, and believe our actions will reestablish Leggett as a more profitable company. Our goal is to consistently generate total shareholder return of 12-15% per year, on average."
Dividends and Stock Repurchases:
Leggett declared a second quarter dividend of $.25 per share (paid on July 15), representing a 39% increase over last year's second quarter dividend of $.18 per share. The current dividend yield is approximately 6.3% (based on a $16 stock price). This year marks the company's 37th consecutive annual dividend increase at an average compound growth rate of over 14%.
During the quarter the company bought 2.7 million shares of its stock at an average price of just under $18 per share. So far, the company has purchased 6.9 million shares under its annual 10 million share repurchase authorization. As a reminder, Leggett's Board has authorized the purchase of an additional 20 million shares with proceeds from the divestitures.
2008 Outlook: $1.00 to $1.30 EPS:
Expected earnings per share (from continuing operations) for the full year 2008 remain unchanged at $1.00-$1.30, even though guidance now incorporates higher restructuring-related costs (of approximately $.10, versus the prior estimate of $.05). Guidance does not include earnings from discontinued operations, possible gains or losses from future divestitures, nor additional stock repurchases the company expects to make with divestiture proceeds.
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"Despite external economic challenges, we feel very comfortable with our strategic direction and the initiatives we unveiled last November. We are absolutely committed to the continued execution of our plan, and believe our actions will reestablish Leggett as a more profitable company. Our goal is to consistently generate total shareholder return of 12-15% per year, on average."
Dividends and Stock Repurchases:
Leggett declared a second quarter dividend of $.25 per share (paid on July 15), representing a 39% increase over last year's second quarter dividend of $.18 per share. The current dividend yield is approximately 6.3% (based on a $16 stock price). This year marks the company's 37th consecutive annual dividend increase at an average compound growth rate of over 14%.
During the quarter the company bought 2.7 million shares of its stock at an average price of just under $18 per share. So far, the company has purchased 6.9 million shares under its annual 10 million share repurchase authorization. As a reminder, Leggett's Board has authorized the purchase of an additional 20 million shares with proceeds from the divestitures.
2008 Outlook: $1.00 to $1.30 EPS:
Expected earnings per share (from continuing operations) for the full year 2008 remain unchanged at $1.00-$1.30, even though guidance now incorporates higher restructuring-related costs (of approximately $.10, versus the prior estimate of $.05). Guidance does not include earnings from discontinued operations, possible gains or losses from future divestitures, nor additional stock repurchases the company expects to make with divestiture proceeds.
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