UPDATE 2-Herman Miller's profit up on price increases
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NEW YORK, March 21 (Reuters) - Office furniture maker Herman Miller Inc. (MLHR.O) on Wednesday posted a 44.2 percent increase in third quarter net income as price increases offset seasonal order rate volatility.
The company also forecast fourth quarter earnings below analysts' expectations. Its stock fell about 7 percent in after-hours trading.
Herman Miller said net income rose to $32.3 million, or 50 cents a share, in its third quarter ended March 3, from $22.4 million, or 33 cents a share, a year earlier.
Analysts had expected Herman Miller to earn 52 cents a share in the third quarter, according to Reuters Estimates.
The Zeeland, Michigan-based company forecast fourth-quarter earnings of 47 cents to 51 cents a share, an increase of 24 percent to 34 percent over the prior year.
It said it expects sales in the range of $485 million to $505 million, up 9 percent to 14 percent over the prior year. Analysts were expecting earnings of 52 cents a share on sales of almost $500 million.
The U.S. office furniture market has recently showed signs of cooling after a boom period in 2004 and 2005 marked by double-digit percentage increases in orders.
U.S. monthly furniture orders fell in January for the first time since July 2004. Over the preceding six months, they averaged 3 percent growth.
"Overall we're still experiencing strong consolidated year-over-year growth, although we are closely watching the North American macro environment," said Chief Financial Officer Beth Nickels in a statement.
Third quarter sales rose 14.3 percent from last year to $484.8 million, which was less than the $491 million analysts had forecast and was at the low end of the range of $480 million to $500 million that the company forecast in December.
The company said weekly order rates showed seasonal volatility with domestic orders slowing during December but strengthening in mid-January and February, partially due to its price increase.
Price increases also helped drive an increase in its gross profit margin as a percentage of sales, to 33 percent from 32.5 percent in the year ago quarter.
Shares of Herman Miller fell $2.69, to $35.15 in after-hours trading.
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