Driven by double-digit sales growth in its power tools division, Black & Decker Corp. reported first-quarter earnings yesterday that beat analysts' estimates.
The Towson-based toolmaker's profit for the three months ended April 2, excluding a one-time gain from the sale of a $25 million note, was $47.1 million, or 54 cents a share. Net income in the first quarter last year was $39.2 million, or 44 cents a share.
Analysts, on average, were expecting 49 cents a share, according to Zacks Investment Research.
Including the one-time gain and a 6 percent decrease in its tax rate, net earnings were $60.2 million, or 69 cents a share.
"Across the board, they had very, very strong growth," said R. Bentley Offutt, president of Offutt Securities Inc. in Hunt Valley.
The strong earnings appeared to get the interest of investors on Wall Street, where shares of Black & Decker gained $3.875 to $39.0625.
Sales in the power tool division were up 13 percent to $706 million, and fastening-products revenue was $136.3 million, up 8 percent.
The company's third division - hardware and home improvement - saw sales decline 2 percent, due to falling sales of Kwikset locks. That division had revenue of $204.8 million.
Overall revenue for the quarter was $1.04 billion, up 6 percent from the year-ago quarter's $978.5 million.
"Black & Decker is off to an excellent start in 2000," said Nolan D. Archibald, chairman and chief executive. "New product introductions, especially in the lawn and garden category, and benefits from products launched last year contributed to sales growth."
Still, the company's share price is down about 40 percent from its 52-week high of $63.3125, reached in July.
Bentley said investors are likely worried that rising interest rates and, in turn, less home construction and refurbishing will mean lower sales for companies such as Black & Decker.
Construction of new homes and apartments fell 11.2 percent in March, the steepest drop since January 1994.
"Whether that has an actual impact [on tool sales] or not," Bentley said, "historically, that has had an effect on the price of Black & Decker shares."
The company also reported yesterday that it repurchased 2.4 million shares in the first quarter, although that has not yet affected per-share earnings.