Black & Decker Co. (NYSE: BDK) on Friday announced that it had reduced its earnings outlook for the fourth quarter for fiscal 2006, attributing the change to weaker demand by key retailers.
The Towson, Md.-based toolmaker cut its earnings per share (EPS) outlook from October of $1.85 to $1.90 to an estimated EPS of $1.30 to $1.35 per share. For the full year, the firm reduced its earnings outlook expectation of $7 to $7.05 per share to $6.50 per share. Analysts were expecting $7.01 per share, according to Thomson Financial.
The demand environment has weakened compared to recent quarters. In addition, orders from key retailers have decreased much more sharply than sell-through,â€ said Nolan D. Archibald, Chairman and Chief Executive Officer. â€œTherefore, our U.S. sales have been significantly lower than we anticipated.â€
The decline was led by a double-digit rate sale decrease in the Power Tools and Accessories segment for the quarter.
Other segments will most likely report that sales will decrease to low-to-mid single digit rates, the firm said. This all together contributed to the lowered expectations for earnings in the quarter.
In the first half of 2007, the firm expected that a cooler housing market and weaker demand for discretionary goods could lower sales for the year. Pressure will be compounded by the rising cost of commodities, the company said.
Shares of Black & Decker closed down $8.66, or 9.96 percent, to $78.26 in Friday trading on the New York Stock Exchange.