Stanley Furniture Posts 2Q Loss

Stanleytown, VA, July 17, 2007--Stanley Furniture reported a second-quarter loss on Monday after taking a charge. It also cut its full-year profit and sales forecast, sending its shares lower in extended trading.

The furniture maker expects no significant improvement in demand this year amid an industrywide sales slump.

The second-quarter loss came to $2.4 million, or 23 cents a share, compared with earnings of $3.9 million, or 32 cents a share, a year earlier. The charge, which came to $4.5 million after taxes, was tied to the termination of a defined benefit pension plan.

Adjusted for the charge, earnings for the period were 20 cents a share, below the 22 cents expected by analysts, according to Reuters Estimates.

Quarterly sales fell 12.6 percent to $67.7 million and the company said in a statement that "business conditions deteriorated slightly" as the quarter passed. Operating margins declined because of the lower sales and higher raw materials costs.

Furniture companies have been pressured over the past year as the softer U.S. housing market and higher borrowing costs slowed spending on big-ticket items. In December, Stanley announced it would cut 44 percent of the jobs at one of its four U.S. plants to better align staffing with demand.

The company now expects full-year sales of $280 million to $290 million, down from the $300 million to $315 million it expected in April.

The company forecast full-year profit of 65 cents to 75 cents a share, excluding the charge tied to the pension plan termination. That is down from $1 to $1.15 a share it expected earlier this year.

For the third quarter, Stanley Furniture forecast per-share profit of Analysts had expected per-share profit of $1.05 on sales of $304.1 million for the year. For the third quarter, analysts expected profit of 35 cents a share.