Herman Miller Swings To Profit, But Misses View; Shares Down

(RTTNews) - Office furniture maker Herman Miller Inc (MLHR), Wednesday reported a swing to profit in the second quarter, driven mainly by a 20 percent jump in sales and stronger margins. However, earnings for the quarter fell short of Wall Street estimates by a penny, while sales trumped expectations.

Moving ahead, Herman Miller provided a weak outlook for the third quarter, sending its shares down five percent in the after-hours trade.

Michigan-based Herman Miller reported a second-quarter profit of $27.8 million or $0.46 per share, compared with last year's loss of $80.6 million or $1.37 per share. Last year's results included legacy pension expenses of $1.74 per share.

Excluding items, adjusted earnings for the quarter rose to $0.51 per share from last year's $0.42 per share. Analysts polled by Thomson Reuters estimated earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the second quarter rose 20 percent to $565.4 million from $470.5 million last year. On an organic basis, which adjusts for the impact of acquisitions and divestitures and foreign currency translation, sales increased 8.8 percent from last year. Analysts had a consensus revenue estimate of $562.6 million for the quarter.

Sales at the company's key North American segment increased 6.1 percent to $315.3 from last year. Sales at ELA segment, or international sales, were $114.3 million, or up 10.9 percent, while Specialty segment sales rose 4.1 percent to 55.4 million.

Gross margin for the period rose sharply to 36.4 percent from 25.3 percent last year.

Chief Executive Brian Walker said, "This quarter we delivered solid sales and adjusted earnings growth in virtually all of our segments. Gross margin improvement was once again an important component of our earnings growth, supported by higher volumes and reflecting our continuing drive for improved product and channel mix."

Looking forward to the third quarter, the company expects earnings of $0.33 to $0.37 per share on revenues of $510 million to $530 million. Analysts currently expect earnings of $0.44 per share on revenues of $540.3 million for the quarter.

For the full year, Herman Miller expects adjusted earnings of $1.80 to $1.88 per share on sales of $2.15 billion to $2.19 billion. Analysts currently expect earnings of $1.96 per share on revenues of $2.18 billion for the year.

MLHR closed Wednesday's trading at $31.10, up $0.99 or 3.29%. on the Nasdaq. The stock, however, fell $1.61 or 5.18% in the after-hours trade.