NEW BRITAIN, Conn. – Stanley Black & Decker (NYSE: SWK) reported gains in sales and profits today (July 30) despite what the tools and security company called “strong headwinds” from the rising dollar, which had the effect of hurting sales in Europe.
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Sales in the three months ending June 30 totaled $2.9 billion, unchanged from the same period in 2014, but the level number masked an organic growth rate of 8% – offset by a negative 8% impact of currency translation, compared with 2014.
Net income from continuing operations was $236 million, or $1.54 per diluted share, up from $232 million, or $1.39 a share a year earlier. Stanley completed the sale of its security businesses in Spain and Italy this month and reported small losses from those operations as discontinued.
The sales beat estimates by Zack’s Investment Research by $50 million and per-share income beat the estimate by 4 cents, Associated Press reported. Despite that, shares were down by $1.48 to $106.69 in early trading on the New York Stock Exchange.
Operating margin grew to 14.4% from 13.7%, a record since the 2010 Black & Decker merger, “despite $50 million of currency headwinds,” Stanley said.
The company raised its projection for earnings per share in 2015 to a range of $5.70 to $5.90 from $5.65 to $5.85, up 6% to 10% from 2014. Per-share earnings would be an estimated $1.10 a share higher this year if not for the rising dollar, Stanley said.
“Our results from the second quarter and first half of 2015, combined with our recently increased dividend, reflect the continued successful execution of the strategy we communicated at our Investor Day in May: leveraging our world-class franchises and brands to deliver substantial organic growth and margin expansion, while generating strong free cash flow and maintaining a shareholder friendly capital allocation program,” Stanley Black & Decker Chairman and CEO John Lundgren commented in a press release.
He continued, “Organic growth and operating leverage were strong across most of the business, innovation is robust, and the organization remains agile giving us confidence in our ability to navigate the uncertain currency and macro conditions we expect to continue to face in the back half of this year, and positioning us to meet our updated full year financial commitments.”
Sales in the largest segment, tools and storage, rose by 4% on a 10% gain in volume, 1% price hike and 7% currency decline.
North America, which posted its fourth consecutive quarter of double-digit organic growth, continued to benefit from healthy underlying tool demand, share gains from new products and brand extensions, along with a favorable outdoor season, the company said.
Sales decreased by 7% in security and 4% in the industrial segment.
