Stanley Black & Decker Slumps On Weak Earnings Guidance

Stanley Black & Decker

Stanley Black & Decker, Inc. (NYSE: SWK)

Share of Stanley Black & Decker Inc. plunged on Tuesday after the company provided downbeat fiscal 2019 earnings guidance. The tools maker also reported its fourth quarter financial results, shedding some light on how the US housing market is fairing.

As of 11:10 a.m. in New York, the shares were down $18.97, or 13.86% to change hands at $117.94 apiece.

SWK Earnings & Outlook

Stanley Black & Decker Inc. reported net loss in the fourth quarter of $66.7 million, or $0.45 per share, compared with net income of $281.5 million, or $1.84 per share in the same period a year ago. Earnings, adjusted for one-time items, came to $2.11 per share, beating FactSet expectations by a cent.

Net sales during the three months to December 29 totaled to $3.63 billion, compared with $3.46 billion last year. Meanwhile, analysts polled by FactSet had projected net sales of $3.62 billion.

The tools maker said gross margin rate for the quarter was 33.3%. Excluding charges, the rate declined 280 basis points from the earlier-year period as price, volume leverage, and productivity were offset by external headwinds, like tariffs, commodity inflation, and foreign exchange.

Looking ahead, the Connecticut-based company expects fiscal 2019 earnings to be in the range of $7.45 to $7.65 per share, and adjusted earnings of $8.45 to $8.65 per share. Meanwhile, analysts forecast adjusted earnings of $8.79 per share for the year, based on FactSet figures.

Stanley Black & Decker CEO Comments

James M. Loree, President & CEO, commented, “We continue to be well-positioned to deliver share gains as we leverage our robust growth catalysts, which include the continued Craftsman brand rollout, Lenox and Irwin revenue synergies, FlexVolt, e-commerce, emerging markets and new innovations. The organization is keenly focused on margin accretion as we realize the benefits from our $250 million cost reduction program, execute price recovery actions in response to external headwinds, and implement an array of new margin enhancement initiatives.”                  

Stanley Black & Decker Profile

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, products and services for various infrastructure applications, mechanical access, and healthcare solutions. It also manufactures and markets commercial electronic security and monitoring systems. It operates through the following business segments: Tools and Storage, Security, and Industrial.

The Tools and Storage segment comprises of the power tools and equipment, and hand tools, accessories, and storage businesses. The Security segment includes the convergent security solutions and mechanical access solutions businesses. The Industrial segment encompasses the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT. – CNN Money