Industrial tool maker,
Stanley Black & Decker
) reported earnings per share from continuing operations of $1.21
in the second quarter of 2013, up from $1.13 reported in the
year-ago quarter and above the Zacks Consensus Estimate of $1.19.
GAAP earnings per share in the quarter were $1.23. The earnings
result outperformance can be attributed to healthy performance at
the company's three segments.
Stanley Black & Decker generated net revenues of $2,869.3
million, up 11.8% year over year and above the Zacks Consensus
Estimate of $2,813 million. The increase can be attributed to
roughly 6% volume gains and a 7% contribution from acquisitions,
offset partially by 1% impact from unfavorable pricing. Currency
translation had a neutral impact on results this quarter.
Revenue in the CDIY segment (50.4% of second quarter 2013
revenue) rose 8.6% year over year to $1,445.8 million, while the
Security segment (21.3%) reported revenues of $610.7 million,
reflecting a year over year increase of 1.6%. Industrial segment
(28.3%) sales soared 28.1% to $812.8 million.
In the second quarter 2013, Stanley Black & Decker's
normalized cost of sales, as a percentage of revenue came in at
64.6% versus 63.6% reported in the year-ago quarter. Gross margin
was down 100 basis points to 35.4%, due primarily to higher cost
of sales incurred in the quarter.
Selling, general and administrative expenses registered a
year-over-year increase of 11.1% and as a percentage of revenue
declined 20 basis points to 22.9%. Operating margin in the
quarter was 12.4% versus 13.3% in the year-ago comparable
Cash and cash equivalents of Stanley Black & Decker exiting
the second quarter 2013 were $561.74 million, up 0.8% from $557.5
million in the previous quarter. Long-term debt (net of current
portions) was down 1.9% to $3,428.9 million as compared with
$3,494.1 million in the previous quarter.
Normalized net cash flow from operating activities was $271.7
million in the second quarter 2013 versus $366.4 million in the
year-ago quarter. Capital spending declined 15.7% year over year
to $53.8 million. Free cash flow in the quarter was $217.9
million versus $302.6 million in the year-ago quarter.
The company expended approximately $78.4 million in paying
dividends to shareholders in the second quarter 2013.
For 2013, management reiterated its earnings guidance provided
earlier. Earnings per share, excluding one-time charges, are
expected to be within the $5.40-$5.65 range. Organic revenue
growth expectation has, however, been increased from 2%-3% to
GAAP EPS for 2013 is expected to be in the range of $4.46-$4.71,
same as predicted earlier. Free cash flow is projected to be
roughly $1.0 billion.
Stanley Black & Decker manufactures tools and engineered
security solutions across the globe. The stock currently carries
a Zacks Rank #4 (Sell).
The companies that closely compete with Stanley Black &
) - reported adjusted earnings of 76 cents per share, down from
$1.06 earned in the year-earlier quarter but ahead of the Zacks
Consensus Estimate of 73 cents,
Lincoln Electric Holdings Inc.
) - expected to release on Jul 29, 2013, and
) - expected to release on Aug 8, 2013.
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