Black & Decker earnings up 28% Sale of businesses, products credited for strong second quarter; Manufacturing


Black & Decker Corp. said yesterday that second-quarter earnings jumped 28 percent, boosted by a one-time gain from selling businesses and strong sales of its major products.

For the three months that ended June 28, the Towson-based company reported net income of $58.4 million, up from $45.5 million in the year-ago period. Earnings per share increased 30 percent, to 61 cents on a diluted basis from 47 cents in 1997.

Without the gain of $4.2 million, or 4 cents per share -- mostly from the sale of the company's Western Hemisphere household products business -- Black & Decker net earnings increased 19 percent to $54.2 million.

On a per share basis, the increase was 21 percent, to 57 cents.

Sales for the second quarter decreased 1 percent, to $1.17 billion from $1.18 billion in the same period last year. Excluding changes in foreign currencies, sales increased 1 percent.

James Lucas, an analyst with Janny Montgomery Scott, said the results were in line with his expectations of 58 cents. "I don't argue with a penny," he said. "The stock has been phenomenal. The street is enamored with the game plan the company has put in place."

Shares of Black & Decker, which announced earnings after the market closed, rose 31.25 cents, to close at $65 -- about 19 cents below its all-time high.

Shares reached that level Wednesday, when the company said it will sell its glass container-making business to Bucher Holding A.G. of Switzerland for $194 million.

Last month, the company sold its Western Hemisphere household-products business for $315 million, and reached an agreement to sell a controlling interest in its True Temper Sports golf club shaft business for more than $200 million. Together, the three deals will net Black & Decker proceeds of $550 million, which is $50 million more than the company originally anticipated.

The sales were part of a broad restructuring plan announced in January that also included a stock buyback. Black & Decker said yesterday that it had bought about 3 million shares as part of the program to repurchase 10 percent of the 95 million shares outstanding.

The company also said it continues work on a plan that will ultimately eliminate 10 percent, or 3,000, of the company's 30,000 jobs worldwide.

"We also are in the process of integrating cleaning and lighting product lines, which we chose not to sell with the rest of our Household Products business, into North American consumer power tool operations," said Nolan D. Archibald, chairman and chief executive officer.

Those lines include the company's SnakeLight and DustBuster products.

While sales of household products and Emhart Glass declined in the second quarter, sales in the company's core businesses rose 4 percent, excluding changes in foreign currencies.

"Sales in North American power tools, security hardware and plumbing products were particularly strong, while fastening and assembly systems posted a solid increase," Archibald said.

For the first six months of the year, Black & Decker reported a net loss of $913 million, or $9.65 per share, related to a write-off of goodwill and a first-quarter restructuring charge.

Archibald said the company's lower costs are reflected in an improvement of return on sales for the quarter, from 10.2 percent to 12.1 percent.

He also said free cash flow was $85 million higher in the first six months of this year than the year-ago period.

Pub Date: 7/17/98

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad