B&D; shares sink after analysts temper forecasts Expected rebound 'hasn't panned out'


NEW YORK -- Shares of Black & Decker plunged in early trading yesterday and, though rebounding a bit, remained off about 6 percent for the session on heavy volume.

The stock price of the Towson-based home-products company closed at $19.125, down $1.125, after falling as low as $18.375. The sell-off punctuated a far larger slide that dates back to late spring. At that time, the company's shares peaked at nearly $26.875 after having tripled in the prior 18 months.

The most recent decline, on the eve of the important annual National Hardware Show in Chicago, is a sharp reflection of diminishing optimism for the industry's prospects despite the company's contention that business in the United States has begun to improve.

"There was so much euphoria about a turnaround in the home-improvement industry early in the year, and it hasn't really panned out," said Gerard Vander Schauw, publisher of the trade newsletter Home Improvement Executive.

In a series of road shows this spring, Black & Decker was said to have presented a glowing picture of the company's long-term growth and now, as a result, might be vulnerable to unsatisfied expectations.

Yesterday's slide came after two prominent Wall Street analysts tempered their forecasts for the company, citing a slowdown in Europe.

Daniel Carasso of Goldman, Sachs & Co., among the analysts previously most bullish on Black & Decker, removed the company's stock and that of Owens-Corning Fiberglas Corp., which is also tied to the housing industry, from the company's recommended list. He reaffirmed, however, his longer-term belief in both companies' prospects and encouraged investors to remain holders of their shares.

Nicholas Heymann of County NatWest USA Securities presented what he said was a routine re-evaluation of Black & Decker's prospects, reducing his forecasts for the second time since June.

His earnings forecast for 1992, already cut from $1.60 a share to $1.15, was cut again, to $1 a share.

In addition to the slow growth of European economies, Mr. Heymann noted that the U.S. economy was improving far less quickly than expected and that expenses for a key Black & Decker product launch would be higher than earlier thought.

Barbara Lucas, a spokeswoman for Black & Decker, attributed the sell-off to investors' mistaken concern that moves by both analysts indicated troubling new developments.

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