Send me real-time posts from this site at my email
Motley Fool

Why Shares of Steelcase Are Surging Today

What happened

Shares of Steelcase (NYSE: SCS) rose on Friday after the office furniture company reported its second-quarter results. Steelcase produced double-digit revenue growth, beating analyst expectations. As of 12:30 p.m. EDT, the stock was up about 15.5%.

So what

Steelcase reported second-quarter revenue of $875.8 million, up 13% year over year and about $2.1 million ahead of the average analyst estimate. Organic sales rose by 8%, driven by 9% growth in the Americas and 11% growth in Europe, the Middle East, and Africa. Orders rose by 12% year over year in the second quarter, mostly due to project business.

Image source: Steelcase.

Earnings per share came in at $0.41, up from $0.31 in the prior-year period. A few one-time items boosted EPS by $0.05, but the same benefit was also realized in the prior-year period. Gross margin was 33% in the quarter, down 20 basis points year over year due to higher commodity and freight costs, as well as product mix shifts.

Prior to the earnings report, Steelcase announced that it had acquired Orangebox Group Limited for $79 million. This comes a few months after it acquired Smith System, a company focused on the education market. "The acquisitions of Smith System and Orangebox, as well as our new partnership with West Elm and broadened partnership with Bolia, are part of the exciting expansions of our offerings that help support our customers' needs in a changing workplace," said Steelcase CEO Jim Keane.

Now what

Steelcase expects third-quarter revenue between $885 million and $915 million, representing year-over-year organic revenue growth of 11% to 15%. The company forecasts EPS between $0.28 and $0.33, with EPS between $1.10 and $1.15 for the full year.

With solid results and even better guidance, investors have pushed up shares of Steelcase to their highest level since 2015.

10 stocks we like better than Steelcase
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Steelcase wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Popular posts