Fortune 500 diversified manufacturer Leggett & Platt expects significant divestiture-related asset impairments (as anticipated in the November announcement regarding its strategic plans), resulting in a net loss for the fourth quarter. The magnitude of some impairments has not yet been finalized; however, Leggett provided the following information.
Excluding impairment charges, fourth quarter earnings guidance is $.09-.13 per share, a decline of $.11 per share versus October guidance. Approximately $.08 per share of the decline results from higher restructuring-related costs, increased legal reserves, and lower anticipated earnings from business units the company is divesting.
In addition, the company's businesses not targeted for divestiture are expected to post $.03 lower earnings per share than previously anticipated, reflecting softer sales in U.S. residential-related markets, and lower production and overhead recovery as a result of continued efforts to aggressively manage inventories.
Asset impairment charges of approximately $150 million pre-tax (all non-cash) are anticipated in the fourth quarter as a result of the planned divestiture (as previously announced) of the Aluminum Products segment and six additional business units.
The company also expects non-cash goodwill impairment charges in the Fixtures & Display group (which is undergoing significant restructuring), but is awaiting completion of a third-party assessment to determine the amount of this impairment.
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