Steelcase shares pop after beating Street's fiscal 2Q estimates

Shares of Steelcase Inc (NYSE:SCS) are soaring Friday after the furniture company beat Wall Street analysts’ forecasts for the fiscal second quarter and issued promising guidance for the third quarter.

The Grand Rapids, Michigan-based company posted net income of US$49.1mln, or US$0.41 per share, in its fiscal second quarter, up from US$36.9mln, or US$0.31 per share, in the year-ago period.

Its revenue, meanwhile, came in at US$875.8mln, up from US$776mln in the same period last year.

Investors welcomed the results, sending Steelcase shares up nearly 16% to US$18.80 in Friday’s morning trade.

The results crushed the expectations of Wall Street analysts who had forecast Steelcase would earn US$0.29 on revenue of US$875.6mln.

Steelcase was also in the news this week thanks to the announcement of its US$79mln (£60mln) acquisition of Orangebox Group, a UK-based designer and manufacturer of furniture.

Under the deal’s terms, Steelcase acquired all of Orangebox’s outstanding capital stock, less an adjustment for working capital, with an additional US$4mln (£3mln) payable to one of the sellers over three years based on the achievement of certain performance obligations. Steelcase funded the acquisition by borrowings under its credit facility.

For the current quarter, Steelcase expects earnings of US$0.28 to US$0.33 on revenue of US$885mln to US$915mln. This forecast also beats Wall Street’s projection of US$0.25 per share on sales of US$834mln.

Established in 1912, Steelcase makes furniture primarily for offices and its brands include Steelcase, Coalesse, Designtex, PolyVision, AMQ and Turnstone.

Story by ProactiveInvestors