Lumber Liquidators wins the California lawsuit
Lumber Liquidators Holdings, a US-based flooring firm, won a civil case, which had alleged the company for violating a state law in California that urges companies to report warnings regarding the possible harmful substances in their products. Following the news, shares of the company increased 11% during the trading session on Tuesday.
In a preliminary ruling, the jury George C. Hernandez Jr. discovered that Sunshine Park and Global Community Monitor, which filed a case against the company, had not produced any proof, supporting the violation of California's law. The case applicants had accused that the company failed to provide warning details to its customers in California about the presence of formaldehyde in some of its flooring products.
Revenues and stock price of Lumber were impacted in the past year following a "60 Minutes" section on CBS that charged the company with selling some China-made laminate floor covering, which emitted formaldehyde above the standard level prescribed in California emissions law. In March, the company agreed to pay a settlement fee of $2.5 million to the California Air Resources Board, as reported by THE WALL STREET JOURNAL.
Over the recent period, Lumber Liquidators implemented strict safety measures like halting the sale of China made flooring materials that contained high quantity of formaldehyde, threatening the increased cancer risk factors in people with continuous exposure to the flooring. The stocks of the company ended Tuesday trading session at $14.20.
In a press release issued on Tuesday, Lumber Liquidators said that this incident marks a significant milestone in its history as the company moves forward to achieve its business goals and improve its functional performance. "We have implemented significant enhancements to our sourcing and compliance practices, and we look forward to continuing to deliver products that are compliant with California's environmental standards," the company noted.
Share Trading.NEWS quoted a latest report, which stated that 0 analysts have rated Lumber's stock with a "strong buy" rating, o experts with "buy rating, while 13 analysts have rated the stock with "neutral" rating, 1 expert with "sell" rating and 0 analysts with "strong sell" rating. Wedbush's analysts reiterated their rating on the company's stock at "neutral" and fixed a target price of US$13 on the stock.
Meanwhile, financial experts followed by Zacks Research unanimously expect Lumber to report a $-0.29 a share for the quarter. The company's earnings report is scheduled to be released on or around 2016-05-04. Lumber's earnings were $-0.73 per share during the previous quarter that ended December 31, 2015. The analysts had expected an earnings number of $-0.5 per share for the quarter.
The company is optimistic about the financial position and expect to achieve its financial goals in the coming periods. The victory over the plaintiffs in the lawsuit highlights the company's progress in the long run.