Tool maker Black & Decker Corp posted a better-than-expected quarterly profit, and raised its 2009 forecast, citing improved sales outlook for the second half of the year.

Black & Decker, which also makes home improvement products, said though its end-markets remained extremely weak during the quarter, previously announced cost cuts helped it post better operating margins.

Black & Decker has cut jobs, executive compensation and dividend as the housing slump has taken a toll on its business.

The company now expects 2009 earnings of $1.65 to $2 a share, excluding items, up from its prior forecast $1.50 to $1.90 a share.

Analysts were looking for earnings of $1.58 a share, before items.

It expects third-quarter sales to decline similar to the first half of the year, but sees a narrower sales decline in the fourth quarter.

For the second quarter, Black & Decker's net income fell 61 percent to $38.3 million, or 63 cents a share, from $96.7 million, or $1.56 a share, a year ago.

Revenue fell 27 percent to $1.19 billion.

Analysts were expecting earnings of 37 cents a share, before special items, on revenue of $1.19 billion, according to Reuters Estimates.

Shares of the company closed at $33.72 Thursday on the New York Stock Exchange. They were trading up 6 percent at $35.90 before the bell.

(Reporting by A.Ananthalakshmi in Bangalore; Editing by Jarshad Kakkrakandy)