Why Leggett & Platt Stock Zoomed 4% Higher Today

Considering the news it dropped after market hours Monday, Leggett & Platt (NYSE: LEG) stock was something of a surprise gainer the following day. The diversified manufacturer rose by more than 4% on the back of that news, specifically the company's latest earnings release. That performance was significantly better than that of the S&P 500 index, which crawled upwards less than 0.2%.

Investors bullish despite declines

In its third quarter, Leggett & Platt booked sales of $1.1 billion. This represented a 6% decline over the same quarter of 2023. Net income also slid, coming in at just under $45 million ($0.33 per share) from the year-ago profit of almost $53 million under generally accepted accounting principles (GAAP) standards. On a non-GAAP (adjusted) basis, earnings per share (EPS) was $0.32 against the $0.36 of the third quarter of 2023.

Those figures were more or less in line with analyst expectations, despite the drops. On average, pundits tracking Leggett & Platt stock matched reality with a $1.1 billion revenue estimate, and came close with their collective adjusted EPS projection of $0.33.

In the earnings release, CEO Karl Glassman was quoted as saying that Leggett & Platt "continued to make solid progress on our restructuring and operating efficiency improvement initiatives, although demand headwinds were more challenging than anticipated."

The company said it would continue with its restructuring program, and revealed that it was considering the sale of its aerospace business. That's likely the reason for the share price pop, although the eroding fundamentals should be more of a concern for investors.

Full-year 2024 guidance adjusted

Management expects these headwinds to continue affecting performance. It reduced the top end of its full-year sales guidance and shifted downwards its projected range for adjusted EPS. Leggett & Platt now anticipates sales will come in at $4.3 billion to $4.4 billion, where previously it was modeling $4.3 billion to $4.5 billion. The new adjusted EPS range is $1.00 to $1.10, down from the preceding $1.10 to $1.25.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,217!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,153!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $403,994!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 28, 2024

Eric Volkman 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.