Black & Decker 3Q Falls 35%; Raises FY09 EPS View

   DOW JONES NEWSWIRES 
 

Black & Decker Corp.'s (BDK) third-quarter profit fell 35% as the weak housing industry continued to hurt sales. But the tool and building supplies maker raised its full-year guidance, saying cost-cutting efforts are helping the bottom line, even though near-term demand probably won't rebound.

Black & Decker, which preannounced quarterly results on Oct. 12, reported third-quarter earnings of $55.4 million, or 91 cents a share, down from $85.8 million, or $1.41 a share a year earlier. Sales dropped 23% to $1.2 billion.

Analysts surveyed by Thomson Reuters, on average, expected earnings of 82 cents on $1.2 billion in revenue. It was unclear how many had updated their forecasts after Black & Decker last week raised its quarterly profit outlook to 91 cents from a July view of 35 to 45 cents a share.

Shares, which have gained 17% year to date, rose 2.23% to $50 in premarket trading as the new full-year outlook topped forecasts by more than the latest quarter's outperformance.

Favorable trends in foreign currency translation and earlier-than-expected shipments of industrial power tools to retailers boosted the Towson, Md., company's latest results. A lower-than-expected tax rate also added 14 cents a share to earnings.

"Looking ahead, we are anticipating continued stabilization of demand, but not a near-term rebound," said Chairman and Chief Executive Nolan D. Archibald. " We expect fourth-quarter sales similar to the third-quarter level, which would represent a double-digit rate of year-on-year decline."

With operating margin expected to remain at about 7.5%, Black & Decker said earnings should range from 68 to 78 cents a share in the fourth quarter and from $2.45 to $2.55 for the year, excluding a first-quarter restructuring charge.

Analysts had expected earnings of 50 cents for the fourth quarter and $2.27 for the year. Fourth-quarter sales had expected to be $1.2 billion.

-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; [e-mail]