On Wednesday, Steelcase (SCS +0.00%) will release its latest quarterly results. The maker of business equipment has gone through a lot since the recession hit in 2008, but recently, the company has managed to claw back all of its losses from the financial crisis and trades near levels not seen in more than five years.
Steelcase makes furniture systems, focusing on large corporate customers as its main clientele. Yet with all the cost-cutting that's been going on among the biggest companies in the world, one easy place to cut back is on high-end office furniture and that poses a substantial threat to the company going forward. Let's take an early look at what's been happening with Steelcase over the past quarter and what we're likely to see in its quarterly report.
Stats on Steelcase
|
Analyst EPS Estimate |
$0.13 |
|
Change From Year-Ago EPS |
0% |
|
Revenue Estimate |
$689.93 million |
|
Change From Year-Ago Revenue |
2.2% |
|
Earnings Beats in Past 4 Quarters |
2 |
Source: Yahoo! Finance.
Can Steelcase take advantage of better times ahead?
In recent months, analysts have become less excited about Steelcase's earnings prospects, cutting a nickel per share from their May-quarter views and almost twice that from their estimates for the full fiscal year. The stock, though, has kept pushing higher, Analysts have gotten less optimistic about Jabil's earnings prospects recently, reducing their estimates for the May quarter by $0.08 per share and their full-year fiscal 2013 consensus by double that figure. That has pulled the stock back somewhat from its highs during the winter, although it's down less than 3% from its mid-March levels.
Steelcase continues to deliver quality products to the marketplace. Last week, the company won five Best of NeoCon awards at the largest contract furnishings trade show in North America. With a variety of products ranging from what it calls "vertical intelligent architecture" and its Gesture line of chairs to specialized systems for health care and an innovative stool, Steelcase continues to come up with products that companies are willing to pay up for.
But the real test of the company's success is whether businesses have the capacity to make big purchases like this, and it appears that investors throughout the space are starting to get more optimistic about a comeback. Herman Miller (MLHR 2.34%) also trades near multiyear highs as it has managed to grow not just from improving business conditions but also with its purchase of Maharam Fabric, helping to complement its own furniture business. HNI (HNI 1.23%), which makes office furniture as well as fireplaces, stoves, and inserts, recently returned to profitability, although its furniture segment were hit by a drop in government spending.
In Steelcase's report, look for signs of how the company is doing on a competitive level against its peers. As conditions improve, it'll be increasingly important for Steelcase to hold its own and try to take share away from its rivals in the industry.
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