Black & Decker Corp.'s (BDK) second-quarter profit plunged 60% amid a continuing sales slump, though core earnings beat analysts' expectations.

That prompted the toolmaker and home-improvement products company to boost its full-year earnings outlook to $1.65 to $2 a share from April's reduced view of $1.50 to $1.90. But it cut is sales forecast, now seeing a decline of 24%, not 20%, despite less-than-anticipated currency impacts.

In addition, the company also projected third-quarter earnings of 35 to 45 cents a share. Analysts surveyed by Thomson Reuters, on average, expected 52 cents.

Chairman and Chief Executive Nolan D. Archibald said, the company expects most of its markets to remain weak this quarter, though he sees a narrower decline in the fourth quarter, citing "some stabilization in the automotive industry."

Investors overall expressed pleasure with the news, as shares rose 6.5% premarket to $35.91. The stock through Thursday was down 19% this year.

Black & Decker has slashed its dividend and has taken other cost-cutting steps in an attempt to mitigate the impact of deteriorating markets, especially in Europe and the auto industry in general. But the outlook for U.S. home-improvement products is gloomy, with 2009 product sales seen heading for their first three-year decline since record-keeping began more than 40 years ago, according to market researcher Global Insight.

Black & Decker reported second-quarter earnings of $38.3 million, or 63 cents a share, down from $96.7 million, or $1.56 a share a year earlier. Sales dropped 27% to $1.19 billion, with currency fluctuations diminishing revenue by 5 percentage points.

The company in April projected earnings of 35 cents to 45 cents a share on a revenue drop "similar" to the first quarter's 28%.

Gross margin fell to 31.2% from 32.7%.

Sales of power tools and accessories, by far its largest segment, skidded 21%.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com