Diversified wire product manufacturer Leggett & Platt reduced its full-year 2017 EPS guidance to a range of $2.44-$2.54. This guidance includes a $.04 EPS benefit from the recent sale of a Commercial Vehicle Products (CVP) operation.
Adjusted EPS guidance, which excludes the $0.04 gain on the sale, is now $2.40-$2.50. This is a $0.15 decrease from prior adjusted EPS guidance of $2.55-$2.65. Full year sales guidance is unchanged at $3.9-$4.0 billion. Based upon this guidance, full-year EBIT margin should be about 12 percent. Cash from operations is expected to approximate $425 million for the year.
In a statement, the company said the reduction in EPS guidance primarily reflects renewed inflation of steel costs, a related increase in estimated LIFO expense, and demand weakness in the furniture and bedding retail markets.
Effective August 4, 2017, Leggett & Platt sold its Masterack operation, the last remaining business within its CVP group. The sale generated a $3 million pre-tax loss, but this was more than offset by an $8 million tax benefit due to the high tax basis. Altogether, the transaction is expected to generate a $.04 benefit to EPS. Masterack is a manufacturer of steel, aluminum and composite van racking, storage systems, and shelving for commercial work trucks.