Stanley Black & Decker reported gains in sales and profits Thursday despite what the New Britain tools and security company called “strong headwinds” from the rising dollar, which had the effect of hurting sales in Europe.
Sales in the three months ending June 30 totaled $2.9 billion, unchanged from the same period in 2014, but the level number masked an organic growth rate of 8 percent — offset by a negative 8 percent impact of currency translation, compared with 2014.
Net income from continuing operations was $236 million, or $1.54 per diluted share, up from $232 million, or $1.39 a share a year earlier. Stanley completed the sale of its security businesses in Spain and Italy this month and reported small losses from those operations.
The sales beat estimates by Zack’s Investment Research by $50 million and per-share income beat the estimate by 4 cents, The Associated Press reported. Despite that, shares were down $3.66, or 3.4 percent, to $104.51 Thursday on the New York Stock Exchange.
Operating margin grew to 14.4 percent from 13.7 percent, a record since the 2010 Black & Decker merger, “despite $50 million of currency headwinds,” Stanley said.
The company raised its projection for earnings per share in 2015 to a range of $5.70 to $5.90 from $5.65 to $5.85, up 6 percent to 10 percent from 2014. Per-share earnings would be an estimated $1.10 a share higher this year if not for the rising dollar, Stanley said.
Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented: “Our results from the second quarter and first half of 2015, combined with our recently increased dividend, reflect the continued successful execution of the strategy we communicated at our investor day in May: leveraging our world-class franchises and brands to deliver substantial organic growth and margin expansion, while generating strong free cash flow and maintaining a shareholder friendly capital allocation program.
“Organic growth and operating leverage were strong across most of the business, innovation is robust, and the organization remains agile,” Lundgren added, “giving us confidence in our ability to navigate the uncertain currency and macro conditions we expect to continue to face in the back half of this year, and positioning us to meet our updated full year financial commitments.”
Sales in the largest segment, tools and storage, rose by 4 percent on a 10 percent gain in volume, 1 percent price hike and 7 percent currency decline.
“North America, which posted its fourth consecutive quarter of double-digit organic growth, continued to benefit from healthy underlying tool demand, share gains from new products and brand extensions, along with a favorable outdoor season,” the company said.
Sales decreased by 7 percent in security and 4 percent in the industrial segment.
Stanley shares are up 8.6 percent in 2015 after Thursday’s decline.
