Steelcase (SCS) Tops Q4 EPS by 8c, Beats on Revenues

Note: EPS may not be comparable

Steelcase (NYSE: SCS) reported Q4 EPS of $0.24, $0.08 better than the analyst estimate of $0.16. Revenue for the quarter came in at $772.7 million versus the consensus estimate of $750.7 million.

Outlook

Orders in the Americas grew 2 percent in the fourth quarter and backlog at the end of the quarter in the Americas was flat compared to the prior year, which included $16 million of orders related to a very large project. EMEA orders grew 15 percent and backlog at the end of the quarter was 22 percent higher than the prior year. Orders and backlog in the Americas and EMEA were favorably impacted by the pull-forward effect of February list price adjustments. Orders in the Other category declined 9 percent compared to the prior year, which included a record level of quarterly orders in Asia Pacific. Considering these and other factors, the company expects first quarter fiscal 2019 revenue to be in the range of $740 to $765 million. Adjusted for an estimated $20 million of favorable currency translation effects, and the impact of an acquisition and divestitures, the projected revenue range translates to an expected organic decline of 3 percent to organic growth of 1 percent. In the first quarter of fiscal 2018, the company reported revenue of $735.1 million.

Steelcase expects to report diluted earnings per share between $0.12 to $0.16 for the first quarter of fiscal 2019. The estimates include lower gross margin compared to both the first and fourth quarters of fiscal 2018 (due to increasing commodity costs and continuation of some of the same drivers which negatively impacted gross margins in the fourth quarter) and a similar level of operating expenses compared to the fourth quarter of fiscal 2018. Steelcase reported diluted earnings per share of $0.15 in the first quarter of fiscal 2018.

"As we enter fiscal 2019, we expect to maintain our level of increased investment in product development and marketing, while continuing to control spending in other areas of our business and managing the implications of expected higher raw material costs," said Jim Keane. "We also expect to see additional revenue growth from the expansion of our portfolio of offerings through acquisitions and marketing partnerships."

For earnings history and earnings-related data on Steelcase (SCS) click here.

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