Stanley Black & Decker Earnings: Four Straight Quarters of Profit Drops

S&P 500 (NYSE:SPY) component Stanley Black & Decker Inc. (NYSE:SWK) reported a lower net income in third quarter, missing analysts’ estimates. Stanley Black & Decker supplies tools and engineered solutions for professional, industrial, construction, and do-it-yourself use, as well as security solutions for industrial and commercial applications.

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Stanley Black & Decker Inc. Earnings Cheat Sheet

Results: Net income for the machine tools and related products fell to $115 million (69 cents per share) vs. $154.6 million (92 cents per share) a year earlier. This is a decline of 25.6% from the year-earlier quarter.

Revenue: Rose 6.2% to $2.8 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Stanley Black & Decker Inc. fell short of the mean analyst estimate of $1.52 per share. It fell short of the average revenue estimate of $2.9 billion.

Quoting Management: Stanley Black & Decker’s President and CEO, John F. Lundgren, commented, “During the quarter, we saw pockets of strength within our Hand and Power Tool businesses in the U.S. and the emerging markets, largely driven by our successful new product innovations, which are enabling us to continue to gain market share. Our Engineered Fastening business was a bright spot in our Industrial segment, as increased vehicle platform penetration drove growth in the U.S. and in Asia, which more than offset the pullback we saw in the European industrial markets. Conversely, our Industrial & Automotive Repair business in Europe, which is one of the most profitable in the Industrial segment, continued to experience market-related contraction.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 7.3% to $2.81 billion in the second quarter. The figure rose 11.4% in the first quarter from the year earlier and climbed 13.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company’s net income has fallen for the last three quarters. In the second quarter, net income fell 21.5% from the year earlier, while the figure fell 23.3% in the first quarter.

The company has fallen short of estimates for two consecutive quarters. In the second quarter, it missed expectations by 4 cents with net income of $1.09 versus a mean estimate of net income of $1.13 per share.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next-quarter performance. The average estimate for the fourth quarter is now $1.60 per share, down from $1.62. The average estimate for the fiscal year is $5.77 per share, down from $5.87 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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