Profit at Black & Decker Corp. soared 31 percent in the fourth quarter as more buyers than expected snapped up the company's DeWalt power tools and two newly acquired security hardware companies delivered strong performances.
The Towson maker of power tools also said yesterday that it expects earnings growth of as much as 11 percent in 2004 as it continues launching new products, seeking acquisitions and cutting costs by moving production overseas.
Net earnings rose to $99.5 million, or $1.27 per diluted share, in the quarter that ended Dec. 31, meeting the expectations of analysts polled by Nelson Information. That compared with earnings of $75.7 million, or 94 cents per diluted share in the fourth quarter of 2002, the company reported. Excluding restructuring charges, diluted earnings per share were $1.35, up from $1.05 per share in the fourth quarter of 2002.
Shares of Black & Decker closed yesterday on the New York Stock Exchange at $50.01, down $1.03.
For the year, net earnings rose to $293 million from $229 million, a 27 percent increase. Earnings per share hit a record $3.75 for the year, compared with $2.84 in 2002. Excluding restructuring charges in both years, diluted earnings per share reached $4.02.
Sales from continuing operations for the fourth quarter rose 11 percent to $1.34 billion, helped by favorable currency rates and the fourth-quarter acquisitions of Baldwin Hardware Corp., an upper-end maker of brass hardware and locks, and Weiser Lock Corp., a line of locks sold at mass retailers. Sales rose 2 percent, without taking those acquisitions and the currency exchange rates into account.
For the year, sales rose 4 percent, to $4.48 billion, from $4.29 billion in 2002. But excluding the boost from the currency rates and the acquisitions, sales for the year fell 1 percent, the company said.
All three of Black & Decker's business segments - power tools and accessories, hardware and home improvement, and fastening and assembly systems - reported higher sales, led by hardware and home improvement with a 42 percent increase.
Much of that increase came from the newly acquired companies, as well as from the wider distribution of Price Pfister faucets in Lowe's home improvement stores. Sales of DeWalt power tools grew at double-digit rates thanks to the launch of new products including a corded/cordless utility vacuum, a thickness planer and a belt sander.
The acquisitions "improved our market position in Canada and gives us a stronger market position overall in North America," said Barbara Lucas, a Black & Decker spokeswoman.
"This will give us the strongest position of any competitor in North America, across all price points."
The company said it cut costs by $50 million last year as part of a multiphase restructuring program announced in 2002. This meant completing the closing of a plant in Easton, on the Eastern Shore, and moving product assembly lines from North Carolina to Mexico, and from the United Kingdom to the Czech Republic. This year, the plan calls for achieving savings of $45 million.
Also this year, the company will begin phasing out a Kwikset plant with 1,200 workers in Bristow, Okla. It also will close a Weiser administrative and distribution plant in Tucson, Ariz., to consolidate those functions with the company's hardware and home improvement headquarters in Lake Forest, Calif.