Black & Decker quarterly profit 'bodes well'

April 27, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

Helped by a combination of lower interest expense and income taxes, Black & Decker Corp. reported yesterday higher-than-expected earnings of $13.9 million, or 13 cents a share, for the first quarter.

However, operating income for the Towson-based power tool and appliance maker dropped to $67.1 million, or by 13.6 percent, from $77.7 million a year ago.

"Under the circumstances, this was a very representative quarter and bodes well," said David S. Leibowitz, senior vice president for American Securities Corp., a New York stock brokerage.

"It indicates management has gotten cost under control better than they were a year ago."

The market reacted well to the news, pushing the stock up $1, to $19 a share.

A year ago, the company lost $230.7 million, or $3.76 a share, in the first quarter. But this included a noncash charge of $237.6 million for accounting rule changes.

Excluding that charge, income for the previous first quarter was $6.9 million, or 6 cents a share.

Lower operating results stemmed from a "poor economic climate in Europe as well as consumer preference for lower-cost and generally lower-margin products," Nolan D. Archibald, chairman and chief executive, said in a statement.

"Foreign currency exchange effects ands costs associated with

launching new products, such as DeWalt power tools and TITAN lock sets, also contributed to the decline," he said.

Stock analysts had been expecting earnings for this year's first quarter of between 7 and 10 cents a share, according to Black & Decker spokeswoman Barbara Lucas.

But she said income was boosted by lower-than-expected interest costs, which dropped to $40.9 million, representing a 32.3 percent decrease from $60.4 million in the 1992 first quarter.

Although analysts had expected interest costs to be lower, the actual amount came in a few million dollars less than estimates, Ms. Lucas said.

She said the company was able to take advantage of declining rates because about 40 percent of its $2.7 billion debt is floating rate.

Income taxes were also less than expected, despite reaching $9.7 million, 24.4 percent higher than the same period a year ago.

Black & Decker

Corp.. .. .. .. .. ..Ticker.. .. .. .. .. ..Yesterday's .. .. .. .. .. ... ..Symbol .. .. .. .. .. .Cls.. .. ..Chg.

.. .. .. .. .. .. BDK .. .. .. .. .. .. .19.. ... ..+1

Period ended

April 4 .. .. .. .. 1st qtr.. .. .. .. .. .. Year ago .. .Chg.

Revenue .. .. .. ..$1,095,800 .. .. .. .. ..$1,066,500 .. +2.7%

Net Income .. .. ..$13,900 .. .. .. .. .. ..$(230,700)*. .. --

Primary EPS .. .. ...$0.13 .. .. .. .. .. ..$(3.76)*. .. .. --

Figures in thousands (except per share data).

* Excluding charges for accounting changes, income for 1992's first quarter was $6.9 million, or 6 cents a share.

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