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Steelcase Has Strong Quarter
GRAND RAPIDS — With the release of its second quarter financial results this morning, Steelcase Inc. trumpeted significant increases in profitability and market presence in the face of a softening North American office furniture market.
Earnings for the company rose 42 percent to $37.7 million, or 26 cents per share, beating Wall Street estimates by three cents per share. Sales rose 5 percent to $825 million, significantly ahead of analyst predictions. The international segment, which a year ago posted a loss, increased revenue by 19 percent. Last week, the company announced the acquisition of Chinese manufacturer Ultra Office Furniture.
There was also unspecified growth in the domestic market. Yesterday, the company’s chief local competitor, Herman Miller, reported a 5 percent decline in that segment. The Business and Institutional Furniture Manufacturers Association is forecasting U.S. industry growth of 2.3 percent in 2008, which would be the lowest positive growth on record and the least optimistic projection since the end of the industry’s recession in 2003.
In the coming quarter, Steelcase expects third-quarter profit of 27 cents to 32 cents per share, above current Wall Street estimates of 27 cents per share.
The stock closed yesterday on the New York Stock Exchange at $17.75; it opened this morning after the release at $18.25, and has fallen throughout the day.