April 24, 2009 / 12:05 PM / 9 years ago

UPDATE 2-Stanley Works' Q1 profit beats Street view

* Q1 EPS $0.48 from cont ops, incl items

* Q1 revenue $913 mln

* Sees 2009 net/shr $2-$2.50

* Cuts 550 jobs in Q1

(Adds details)

April 24 (Reuters) - Tool maker Stanley Works (SWK.N) posted adjusted quarterly profit that beat Street estimates, helped by restructuring actions, and said it will consolidate its fastening systems business with consumer tools and storage.

The supplier of tools, hardware and security systems also said it cut 550 jobs during the quarter and initiated an additional cost reduction program of $100 million.

Stanley Works, which did not provide outlook last quarter, said it now has sufficient visibility to provide 2009 earnings and free cash flow outlook.

It sees 2009 earnings of $2 to $2.50 a share, including charges of 42 cents. Analysts were looking for $2.48 a share, before items.

It sees free cash flow of over $300 million in 2009 and unit volume declines of 13 to 15 percent.

“Negative volume trends and the headwinds of unfavorable currency movements will impact our earnings potential this year,” Chief Financial Officer Donald Allan said in a statement.

Total restructuring charges for 2009 are expected to be $45 million, majority of which will be recorded in the second and third quarters.

Stanley Works cut about 2,000 jobs, closed three plants and suspended certain employee benefits temporarily in 2008 to keep a lid on costs.

In January, the company had said it might take another set of restructuring actions, if its business environment worsens.

On Thursday, another tool maker Black & Decker BDK.N posted a 93 percent drop in quarterly profit and cut 2009 outlook citing weakness in all its end markets.

Both the companies have been hit by a sharp decline in the housing market.

Stanley Works’ first-quarter net income fell 43 percent to $37.7 million, or 47 cents a share, from $66.5 million, or 83 cents a share, a year ago.

Income from continuing operations was 48 cents a share, including restructuring charges of 8 cents.

According to Reuters Estimates, earnings of 56 cents a share, excluding restructuring charges, beat consensus estimates of 43 cents a share.

Revenue fell 15 percent to $913 million, below analysts’ view of $983.1 million.

During the quarter, the company had a negative free cash flow of $18 million and sales unit volume decline of 19 percent.

Shares of Stanley Works closed at $33.62 Thursday on the New York Stock Exchange. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Anil D’Silva) ((ananthalakshmi.as@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: ananthalakshmi.as.reuters.com@reuters.net))

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