Furniture Brands 1Q Earnings Off

St. Louis, MO, May 3, 2007--Furniture Brands International reported sharply lower first-quarter profit on Wednesday as soft retail conditions hurt sales, and forecast a loss for the current second quarter.

"We do not see an improving marketplace," Chairman and Chief Executive W.G. (Mickey) Holliman said in a statement. Shares were down 5 percent in extended trading.

The St. Louis-maker of Thomasville, Lane, Broyhill and other furniture brands last week said it would close three North Carolina plants and cut about 330 jobs, or about 2 percent of its workforce, to bring costs in line with current revenues.

First-quarter earnings came to $2.9 million, or 6 cents a share, down 90 percent from $30.2 million, or 61 cents a share, a year earlier.

Results for the latest period included costs of 4 cents a share tied to severance charges and increased expenses tied to a gain on interest-rate swaps.

First-quarter sales fell 13 percent to $573.7 million, better than analysts expectation of nearly $563 million.

The company said it expects a loss of 7 cents to 11 cents a share, including restructuring charges, for the second quarter as sales drop about 15 percent. Analysts expected profit of 16 cents a share for the second quarter, according to Reuters Estimates.

Furniture Brands expects its latest plant closures and job cuts to save $13 million annually but added that charges of about 5 cents a share would be spread over the second and third quarters.

Before last week's job-cut announcement, the company had also reported in a federal filing that CEO Holliman took a 25 percent cut in his base salary for 2007 to $694,000 from $925,000.

Furniture Brands shares were down 5 percent to $15.41 in electronic trading from their $16.23 close on the New York Stock Exchange after the results were announced on Wednesday.