Stanley Black & Decker Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Stanley Black & Decker, Inc. (NYSE:SWK) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. 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.

Stanley Black & Decker, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.40 per share, a rise of 2.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.45. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. For the year, analysts are projecting profit of $5.25 per share, a rise of 0.2% from last year.

Past Earnings Performance: For the past three quarters, the company’s quarterly results have come in below analyst’s expectations. Last quarter, the company reported net income of $1.40 per share versus a mean estimate of profit of $1.45 per share.

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A Look Back: In the third quarter, profit fell 25.5% to $115.2 million (69 cents a share) from $154.6 million (92 cents a share) the year earlier, missing analyst expectations. Revenue rose 5.7% to $2.79 billion from $2.64 billion.

Here’s how Stanley Black & Decker traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

SWK

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.02 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.14 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 23.8% to $4.67 billion while assets rose 10.4% to $4.75 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 3.9% in revenue from the year-earlier quarter to $2.68 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.4% in the fourth quarter of the last fiscal year, 11.4% in the first quarter and 7.3% in the second quarter before increasing again in the third quarter.

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 23.3% in the first quarter, by 21.5% in the second quarter and again in the third quarter.

Analyst Ratings: With six analysts rating the stock as a buy, none rating it as a sell and six rating it as a hold, there are indications of a bullish outlook.

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