Image source: Steelcase, Inc.

What happened

Shares of Steelcase, Inc. (SCS 1.97%) rose 12.8% Thursday after the office furniture specialist released weaker-than-expected fiscal second-quarter 2017 results, but offered encouraging guidance for a return to growth going forward. 

So what

Quarterly revenue fell 7% year over year, to $758 million, and translated to net income of $38.2 million, or $0.31 per diluted share. Excluding restructuring charges, Steelcase's net income fell 8.6% year over year, to $0.32 per diluted share. By contrast, Steelcase's outlook called for revenue in the range of $770 million to $795 million, but roughly the same earnings per share (on both a GAAP and adjusted basis) in the range of $0.29 to $0.33.

Steelcase CEO Jim Keane explained that July orders fell 8% in the Americas, leading to lower overall revenue than anticipated. But Keane also added:

While the domestic economic and political environments remain uncertain, Americas orders improved in August and early September on the strength of new products, our project opportunity pipeline for the next twelve months has expanded, and we are expecting growth in the third quarter compared to the prior year. Our [Europe, the Middle East, and Africa] business also continues to improve, although Brexit and other political factors are contributing to persistent headwinds, impacting our expectations for the second half of the year.

Now what

More specifically, Steelcase expects fiscal third-quarter revenue of $795 million to $820 million, including organic revenue growth of 1% to 4%. On the bottom line, Steelcase expects third-quarter earnings per diluted share of $0.32 to $0.36, including a $0.01 per-share negative impact from restructuring costs.

By contrast, analysts' consensus estimates predicted Steelcase would achieve revenue of $807.4 million in the quarter, and adjusted earnings of $0.35 per share.

Of course, that guidance wasn't overwhelmingly positive, and more than anything confirmed what Wall Street was hoping to hear. So in light of its relative underperformance in Q2, it's somewhat surprising to see shares of Steelcase climb so much in today's trading. To be fair, however, it's worth noting shares are still down more than 20% over the past year, indicating perhaps investors were were willing to buy Steelcase stock in light of any perceived turning point for the company.

In the end, while I'm not personally anxious to dive in and buy Steelcase stock today, I think it's worth adding to your watch list to keep tabs on its progress.