) posted 74 cents third quarter EPS (GAAP basis) and cut its 2005 guidance. ST Robinson Humphrey keeps its buy rating on the shares.
Analyst Kevin Hughes tells S&P MarketScope the company's HVAC unit had better than expected results, but that was offset by very poor margins in its Bath & Kitchen (B&K) business. He notes the company has less pricing ability in the B&K business than in other segments, so it could not pass along the full amount of material and energy price increases. Interestingly, he notes the company also said the mix of revenues went down more to lower-end items in B&K, suggesting that's how the consumer is responding to higher energy prices. Hughes thinks the stock price is attractive at this level, and gives the company an opportunity to do a stock buyback.