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The Stanley Works Reports Operating Results (10-Q)

October 29, 2012 | About:

10qk

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The Stanley Works (SWK) filed Quarterly Report for the period ended 2012-09-29.

Stanley Black & Decker Inc has a market cap of $11.36 billion; its shares were traded at around $67.54 with a P/E ratio of 13.1 and P/S ratio of 1.1. The dividend yield of Stanley Black & Decker Inc stocks is 2.9%. Stanley Black & Decker Inc had an annual average earning growth of 1.6% over the past 10 years.

Highlight of Business Operations:

Net Sales: Net sales were $2.787 billion in the third quarter of 2012 compared to $2.620 billion in the third quarter of 2011, representing an increase of $167.0 million, or 6%. Organic growth remained relatively flat, acquisitions provided a 9% increase in net sales, while the unfavorable effects of foreign currency translation caused a 3% decrease. The CDIY segment grew 4% organically, in comparison to the corresponding 2011 period, which was driven by the success of new product development and market share gains. In the Industrial segment, organic sales fell approximately 2% relative to the third quarter of 2011, as strength in the Engineered Fastening business was more than offset by IAR exposure to weakening European markets and declines in the Infrastructure business due to the slow large diameter onshore pipeline market as well as declining scrap steel prices. Organic net sales in the Security segment decreased approximately 3% relative to the third quarter of 2011, due to European exposure and weakness within the MAS business in the US tied to slow commercial construction, soft National Account spending and a product gap within the commercial mechanical lock business. From a geographic standpoint, Europe declined 3% organically, while North America remained relatively flat. The Company succeeded in achieving growth in targeted emerging markets, led by 15% organic growth in emerging Asia, followed by 12% growth in Latin America.

Segment profit amounted to $200.3 million, or 14.6% of net sales, for the third quarter of 2012, compared to $169.8 million or 12.7% of net sales in 2011. Excluding $17.2 million in merger and acquisition-related charges, segment profit totaled $217.5 million, or 15.8% of net sales for the third quarter of 2012 which compares to segment profit of $176.5, or 13.2% of net sales in the third quarter of 2011 (excluding $6.7 million in merger and acquisition-related charges). Segment profit rose 260 basis points to its highest level since the Black & Decker merger due to cost synergies and volume leverage.

Year-to-date segment profit for CDIY was $564.6 million or 14.1% of net sales, compared to $516.9 million or 13.2% of net sales for the corresponding 2011 period. Excluding $31.0 million in merger and acquisition-related charges, segment profit amounted to $595.6 million, or 14.9% of net sales in 2012, compared to $530.2 million or 13.6% in 2011 (excluding $13.3 million in merger and acquisition-related charges). Gross margin improved on a year-to-date basis due to the same factors which impacted the third quarter.

On a year-to-date basis segment profit was $319.2 million or 13.6% of net sales in the first nine months of 2012, compared to $283.8 million or 15.7% of net sales in the first nine months of 2011. Excluding merger and acquisition-related charges of $34.7 million, segment profit amounted to $353.9 million or 15.1% of net sales in the first nine months of 2012, compared to segment profit of $301.5 million or 16.6% of net sales in the first nine months of 2011 (excluding $17.7 million in merger and acquisition-related charges). Year-to-date margin declines are primarily attributable to absorption pressure from volume declines in Europe.

On a year-to-date basis Industrial profit totaled $314.1 million or 16.4% of net sales in the first nine months of 2012, compared to $308.7 million or 16.6% of net sales in the first nine months of 2011. Excluding merger and acquisition-related charges of $3.6 million, Industrial profit amounted to $317.7 million, or 16.6% of sales in the first nine months of 2012 and $309.5 million, or 16.6% of net sales, in the first nine months of 2011 (excluding $0.8 million in merger and acquisition-related

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