Steelcase Profit Misses Estimates; Stock Down - Update

(RTTNews) - Office furniture maker Steelcase Inc. (SCS), Wednesday reported a decline in second-quarter profit, hurt by income tax expense, restructuring and other costs that offset a modest rise in sales. Results for the quarter came in short of Wall Street estimates, due mainly on weakness in the Europe, Middle East and Africa region, even as Americas fared well.

Moving forward, Steelcase detailed a strong sales outlook for the third quarter, betting on growth in Americas, while foreseeing challenges in the EMEA region. The company's earnings for the third quarter are expected to come in line with expectations.

Shares of the company dropped over 4 percent in after-hours trading on the New York Stock Exchange.

"We have tremendous confidence in our global strategy, yet our consolidated results continue to be negatively impacted by the economic crisis in Western Europe," said CEO James Hackett.

Grand Rapids, Michigan-based Steelcase posted quarterly net income of $27.6 million or $0.22 per share, a decline from $29.5 million or $0.23 per share last year.

Results for the quarter include restructuring costs of about $0.02 per share.

On average, four analysts polled by Thomson Reuters estimated earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.

Steelcase, which makes furniture and interior architectural products, said revenues climbed 1.7 percent to $757.6 million from $744.9 million in the same quarter last year. Analysts expected sales of $773.33 million for the quarter.

Sales in the Americas region was up 3.5 percent, while EMEA was down 5.4 percent. Other regions climbed 2.2 percent.

On an organic basis, revenue growth was modest after adjusting for $5 million of favorable currency translation effects and a favorable impact of $4 million from dealer acquisitions.

Operating margin improved 60 basis points year-over-year to 6.9 percent.

For the third quarter, Steelcase expect earnings in the range of $0.23 to $0.27 per share, including restructuring costs of about $0.01 per share, and revenue of $755 million to $780 million. Analysts expect earnings of $0.26 per share on revenue of $757.07 million.

Steelcase declared a cash dividend of $0.10 per share, to be paid on or before October 11 to shareholders of record as of September 30.

Shares of Steelcase closed Wednesday at $15.65, up $0.21 or 1.36%, on a volume of 542 thousand shares on the NYSE. In after hours, the stock dropped $0.65 or 4.15%.