Steelcase Inc. (SCS) Falls on Lower than Expectated Earnings
Shares of Grand Rapids, Michigan, based Steelcase Inc. (SCS) fell on Tuesday, against the backrop of a higher day in stocks overall. Steelcase stock was down 22.93%, falling $4.33 per share, to close at $14.55, on volume of 7,868,986 shares. The company reported lower than expected earnings for its fiscal third quarter that ended November 30.
Founded in 1912, Steelcase Inc. provides office furniture for interior architecture, furniture and technology.
After the close of the market on Monday afternoon Steelcase reported its results from its fiscal third quarter ended November 30. The company reported earnings per share of $0.30, slightly higher than the $0.29 reported for the same quarter one year earlier. However, the analysts consensus estimate for the company's earnings were $0.33 per share, resulting in disappointment that drove the stock price lower in Tuesdays market activity.
The company also reported that revenues for the quarter declined by 1.6% compared to the same quarter a year earlier. The decline was driven mostly by a 20.6% decline in revenue from operations in Europe, the Middle East and Africa. That decline was only partially offset by an increase in revenues of 3.6% in the Americas. As a result of the decline in revenue from foreign sources, the company has lowered its estimate of its fourth quarter earnings per share to the $0.20 to $0.24 range, both well below the performance of the most recent quarter.
Year-to-date the stock price has been range-bound, but the lower than expected earnings for the third quarter, as well as the overall decline and revenues, plus the lower earnings guidance for the fourth quarter (ending February 28) is driving the stock price lower.
"We’re in the midst of reinventing our business model from consolidating our manufacturing footprint to redefining our sales deployment," reported Steelcase CEO and President, Jim Keane. "We are also continuing to launch new products. These initiatives, along with some help from stronger Western European economies, helped us grow orders organically by approximately 20% in the quarter. Demand was very strong for the new products during the quarter, and we extended lead-times for these products while we work to add supply chain capacity; in fact it's possible orders would have been higher still if we had knocked in capacity constraint."
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