DOW JONES NEWSWIRES
Stanley Works' (SWK) first-quarter net income fell 42% as the
tool marker's volume slumped, leading it unveil more cost-cutting
moves, though its security business remained a bright spot.
The company reported first-quarter net income of $38.4 million,
or 47 cents a share, down from $66.7 million, or 83 cents a share,
a year earlier. Results for the latest period included 8 cents in
restructuring-related charges.
Revenue decreased 15% to $913 million as volume dropped 19%.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 39 cents on revenue of $968 million.
Gross margin rose to 39.6% from 37.9% on higher prices and
acquisitions.
The company also said volume and earnings will fall more than
expected, with the first quarter's woes expected to continue this
quarter but ease later in the year.
Stanley Works now sees 2009 shipments declining 13% to 15% from
last year's weakened levels, instead of the 10% to 12% drop
predicted in January. It also sees the related earnings impact of
$2.40 to $2.90 a share, not the $2 to $2.25 previously
projected.
Still, the company sees 2009 earnings of $2 to $2.50 a share, a
range that falls within analysts' expectations.
The maker of such tool brands as Stanley, Mac Tools and Bostich
unveiled an additional cost cuts, with the aim of generating $45
million of savings this year, without giving details. The company
late last year cut 2,000 jobs, or 10% of its work force, shut three
of its 45 plants and eliminated layers of management.
At its security-equipment business, where continued growth has
been stabilizing the company amid the downturn, revenue rose 12% on
acquisitions, and earnings climbed 33%.
Shares closed at $33.62 on Thursday and didn't trade
premarket.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com