Helped by lower interest rates and a more favorable tax arrangement, Black & Decker Corp. said yesterday that its first-quarter income increased by 119.5 percent compared with earnings in the same quarter a year ago.
The Towson-based maker of power tools and household appliances reported income of $9 million, or 10 cents a common share, for the three months, up from $4.1 million, or 7 cents a share, last year.
Revenues dropped to $1.07 billion from $1.09 billion in 1991's first quarter.
Because of dividends on preferred stock sold in September, the amount of earnings applicable to common shares was cut by $2.9 million, or about 4 cents a share.
"Clearly, the company is moving in the right direction," said David S. Leibowitz, senior vice president for American Securities Corp., a New York brokerage.
He noted that lower interest rates have improved the company's balance sheet and that a planned offering of new stock should further ease the strain.
Interest expense, which has been a large cost since Black & Decker acquired Emhart Corp. in 1989, dropped from $81.5 million in the first quarter of 1991 to $63 million in the most recent quarter, during which interest rates fell.
The debt has been reduced to $2.66 billion from $2.84 billion a year ago.
Lower interest rates "will power the bottom line, so their earnings will continue to do well even though sales should remain relatively flat," said R. Bentley Offutt of Offutt Securities, a Baltimore institutional brokerage firm.
The company's income also was helped by a cut in the effective tax rate to 46.4 percent this quarter from 56.8 percent a year earlier, after the company shifted interest expense to foreign operations to offset profits at those divisions.
The Associated Press contributed to this story.