Research Desk Line-up: Kewaunee Scientific Post Earnings Coverage

LONDON, UK / ACCESSWIRE / July 5, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Steelcase Inc. (NYSE: SCS), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SCS, following the Company's posting of its first quarter fiscal 2018 financial results on June 21, 2017. The office furniture maker's sales and earnings numbers lagged behind market estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Business Equipment industry. Pro-TD has currently selected Kewaunee Scientific Corporation (NASDAQ: KEQU) for due-diligence and potential coverage as the Company announced on June 20, 2017, its financial results for Q4 and its fiscal year which ended on April 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Kewaunee Scientific when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on SCS; also brushing on KEQU. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=SCS

http://protraderdaily.com/optin/?symbol=KEQU

Earnings Reviewed

For Q1 FY18, Steelcase reported revenue of $735.1 million compared to revenue of $718.8 million in Q1 FY17, up 2%, or approximately 4% on an organic basis, while orders increased 1%. The Company's revenue numbers lagged behind analysts' expectations of $745 million.

During Q1 FY18, Steelcase's operating income was $29.9 million compared to operating income of $33.3 million in Q1 FY17. The defined benefit plan annuitizations negatively impacted current quarter operating income by $7.3 million. The Company's cost of sales was 67.0% of revenue in the reported quarter, an improvement of 40 basis points compared to the prior year. The improvement was driven by strength in Asia/Pacific, which contributed to a 400-basis point improvement in the ?Other' category.

Steelcase's operating expenses were $212.9 million in Q1 FY18, which represented an increase of $16.8 million, compared to Q1 FY17, or an $8.1 million increase on a sequential basis.

Steelcase posted net income of $18.1 million, or diluted earnings of $0.15 per share. The results reflect the net impact of annuitizing three of the Company's smaller defined benefit plans which reduced diluted earnings per share by approximately $0.03. In the prior year, Steelcase diluted earnings were $0.16 per share. The Company's earnings came in below Wall Street's expectations of $0.18 per share.

Segment Results

During Q1 FY18, Steelcase's Americas segment that serves customers in the US, Canada, the Caribbean Islands, and Latin America posted revenue growth of 3% to $535.0 million, which included revenue from a very large project in the manufacturing sector. Orders in the Americas declined 3% on a y-o-y basis, driven by reduced demand from large customers. The cost of sales in the Americas increased by 10 basis points compared to the prior year. The year-over-year comparison included unfavorable shifts in business mix and $3.4 million of charges related to the defined benefit plan annuitizations in the current quarter and approximately $6 million of warranty retrofit charges in the prior year.

The Company's EMEA segment which serves customers in Europe, Middle-East, and Africa primarily under the Steelcase and Coalesse brands reported that revenue declined 10%, or 4% on an organic basis, to $113.1 million, while orders grew 6%, driven by project business in Eastern Europe and the Middle-East as well as vended solutions at the Company's owned dealers.

EMEA cost of sales increased by 30 basis points compared to the prior year due to the impacts of lower revenue and unfavorable shifts in business mix, offset in part by benefits from gross margin improvement initiatives.

The Other category, which includes Asia/Pacific, Designtex and PolyVision posted revenue growth of 19% to $87.0 million and order growth of 20% on a y-o-y basis, driven by continued strength in Asia/Pacific.

Cash Matters

Steelcase's total liquidity is comprised of cash, short-term investments, and the cash surrender value of Company-owned life insurance, which aggregated to $349 million. Total debt was $297 million at the end of Q1 FY18.

The Company's Board of Directors declared a quarterly cash dividend of $0.1275 per share to be paid on or before July 14, 2017, to shareholders of record as of July 03, 2017.

Outlook

For Q2 FY18, Steelcase is forecasting revenue to be in the range of $750 million to $780 million, which reflects a range of an organic decline of 1% to organic growth of 3% compared to the prior year. Steelcase expects to report diluted earnings per share in the range of $0.21 to $0.25 for the second quarter of fiscal 2018. The Company expects to report a y-o-y increase in operating expense in the upcoming quarter.

Stock Performance

Steelcase's stock is trading slightly up by 0.36%, closing last Monday's session at $14.05 on volume of 626.61 thousand shares. The Company's shares gained 3.01% in the last twelve months. The Company's shares are trading at a PE ratio of 13.76 and have a dividend yield of 3.63%. At Monday's closing price, the stock's net capitalization stands at $1.66 billion.

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SOURCE: Pro-Trader Daily