UPDATE 2-La-Z-Boy posts Q3 profit, shares rise

Tue Feb 16, 2010 6:11pm EST

* Q3 EPS $0.21 vs loss/shr $1.25 yr-ago

* Q3 rev $305.1 mln

* Shares up 7 pct in extended trade (Adds analyst comments, updates share movement)

Feb 16 (Reuters) - Furniture maker and retailer La-Z-Boy Inc (LZB.N) posted a quarterly profit compared with a loss a year ago, helped by strong demand at its upholstery business and lower costs, sending its shares up 7 percent after the bell.

The company, which is known for its popular recliners, said it expects to begin realizing further cost savings, benefiting its results in the next fiscal year, but added that its current primary focus would be to boost sales.

La-Z-Boy's focus on sales growth, coupled with continued expense controls could chart the course for a solid earnings increase in fiscal 2011, Wall Street Strategies analyst Brian Sozzi said in a note.

"We continue to believe that La-Z-Boy, having a stronger capital structure and healthier overall operations, is positioned to reinstate the dividend it abandoned at the height of the credit crisis," he added.

La-Z-Boy has cut costs, curtailed capital spending and suspended some employee benefits and quarterly dividend to help tide over the economic slowdown.

For the third quarter ended Jan. 23, La-Z-Boy earned $11 million, or 21 cents a share, compared with a loss of $64.5 million, or $1.25 a share, a year ago.

Excluding a restructuring charge and new adjustment of income from anti-dumping duties, it earned 17 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose nearly 6 percent to $305.1 million in the quarter, with sales in the upholstery segment surging 18 percent to $234.3 million.

Analysts on average were expecting earnings of 9 cents a share, before items, on revenue of $275.6 million.

"Our mid-price-point focus has served our company well in this environment. We are also encouraged that the consumer appears to be slowly returning to the marketplace," Chief Executive Kurt Darrow said in a statement.

Shares of Monroe, Michigan-based La-Z-Boy rose $0.82 to $12.46 in extended trade. They closed at $11.64 Tuesday on the New York Stock Exchange. (Reporting by Renju Jose in Bangalore; Editing by Unnikrishnan Nair)

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