Earnings Roundup: Stanley Works and Black & Decker
Industrial Distribution staff -- Industrial Distribution, 4/24/2008 7:38:00 AM
A pair of hand and power tool manufacturers, Stanley Works and Black & Decker Corp., posted first-quarter sales and earnings figures.Stanley Works
Stanley posted first-quarter sales of $1.1 billion, up 3.3 percent compared with $1.06 billion during the same period last year.
Net earnings for the New Britain, Conn.-based hand tools manufacturer rose 0.06 percent to $68 million, compared with $67.6 million during the first quarter of 2007.
“Despite continued contraction of several key U.S. markets, we were able to deliver earnings improvement and solid cash flow results due to strength in [the] security, industrial Europe and engineered solutions [divisions]. We continue to focus on portfolio diversification and profitable growth initiatives to successfully achieve our short-term and long-term financial objectives, chairman and CEO John Lundgren said.
Stanley said it developed “contingency plans” in the event that weak demand persists into the second half of the year, “primarily involving cost reductions which will be implemented in [the second and third quarters of 2008].”
“As anticipated, the early 2008 operating environment is one of the most difficult in recollection. Our solid balance sheet and strong cash flow, coupled with our ongoing portfolio diversification strategy, has positioned us well for success. We view 2008 as an opportunity to further advance the company's strategy as well as a year which will demonstrate the inherent strength of our franchise," Lundgren said.
Black & Decker
Black & Decker’s first-quarter sales slipped to $1.5 billion, down 5.2 percent compared with $1.58 billion during the same period last year.
Net earnings for the Towson, Md.-based hand and power tool manufacturer slid 37.7 percent to $67.4 million, compared with $108.1 million during the first quarter of 2007.
The company said the results include a $12.2 million after-tax restructuring charge. Exlcuding that charge, net earnings for the quarter were $79.6 million, down 26.4 percent.
“Black & Decker's results this quarter reflect an increasingly difficult business environment. Demand for tools and home improvement products decreased sharply in North America, and commodity costs continued to rise. We offset some of this pressure on sales and operating income with outstanding growth in developing markets,” chairman and CEO Nolan Archibald said. “This restructuring charge reflects additional steps we are taking to cut costs, such as reducing the size of our workforce, decreasing manufacturing overhead and reorganizing the management structure of our power tools and accessories segment.
“Looking ahead, our sales forecast has decreased since January. We now expect a mid-to-high single-digit rate of organic sales decline for the second quarter and full year. We are implementing more aggressive cost reduction plans, especially in the power tools business, to reflect this revised outlook. However, we do not expect these actions will fully offset the impact of lower volume and ongoing component inflation,” Archibald said. "Today's business climate, including the housing downturn and related credit tightening, poses one of the toughest challenges Black & Decker has faced in many years. We remain confident that our efforts to improve the company's geographic balance and cost structure will enable us to manage through this period effectively.” There are no other articles related to this article.
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