Black & Decker hurt by building slump Earnings fall to half of last year's level

October 18, 1991|By Kim Clark

The continuing U.S. construction slump pushed Black & Decker Corp.'s sales and profits lower this summer.

The tool and hardware giant announced yesterday that it earned $9.7 million in the third quarter, about half the level of the same period last year.

Black & Decker, which has its headquarters in Towson, said that it sold 6 percent fewer coffee makers, power tools and other products in the three months that ended Sept. 30. Overall, sales dropped to $1.1 billion, down from $1.3 billion last year.

Part of the decline was due to Black & Decker's continuing sell-off of businesses it bought when it purchased Emhart Corp. in 1989.

But the recession also hurt the company.

For example, because new-home construction is down, domestic sales of Price Pfister brand faucets has declined, Barbara Lucas, a company spokeswoman, said.

But because interest rates have fallen, the company's borrowing costs also are decreasing, she said.

Black & Decker borrowed $3.8 billion to purchase Emhart, maker of Kwikset locks, Price Pfister faucets and other hardware lines. Black & Decker still has long-term debts of more than $2.6 billion.

There were a few bright spots in the quarter, Ms. Lucas said. Sales in Germany were about 20 percent higher than last year. And sales of Kwikset brand locks have grown as Black & Decker has expanded its distribution into new types of stores.

Stock analysts said they weren't surprised by the meager profit level and predicted an improvement in the economy would make a difference to Black & Decker's bottom line.

Three months ended 9/30/91

... Revenue ... ... ... ... ... ... Net ... ... ... ... ... Share

'91 1,097,300,000 ... ... .. .. .. 9,700,000 ... ... .. .. 0.16

'90 1,274,100,000 ... ... .. .. .. 18,200,000 .. ... .. .. 0.30

% change -14.0 ... ... ... .. .. .. -47.0 ... ... ... ... ... -47.0

Nine months ended 9/30/91

... Revenue ... ... ... ... ... ... Net ... ... ... ... ... Share

'91 3,291,400,000 ... ... .. .. .. 21,100,000 ... ... ... 0.34

'90 3,502,100,000 ... ... .. .. .. 44,300,000 ... ... ... 0.73

% change -6.0 ... ... .. ... ... .. -52.0 ... ... ... .. .. -52.0

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