Stanley Black & Decker declares earnings for 2Q16
Stanley Black & Decker (SWK), the world’s leading toolmaker, declared its 2Q16 earnings before the Market opened on July 22, 2016. SWK stock closed 4.8% higher on the day of the earnings release.
In 2Q16, Stanley Black & Decker’s adjusted earnings per share (or EPS) increased by 19.5% to $1.84 against estimates of $1.72. Its EPS growth was led by stellar organic growth in key segments such as Tools & Storage and Security, which constitute 84% of the company’s sales.
Commodity deflation kept raw material prices in check and, consequently, its gross margins at their highest levels for at least the last ten quarters. The company’s operating margins of 15.8% in 2Q16 is a record since its merger with Black & Decker in 2009. All in all, SWK’s 2Q16 operating performance was impressive.
Stanley Black & Decker’s major US competitor in the tools business, Snap-on (SNA), declared its earnings on July 21. Snap-on reported adjusted earnings per share of $2.36, a growth of 16.3% over the last year, eclipsing its consensus earnings estimate by $0.13.
However, SNA missed its consensus estimate on sales by ~$4.5 million after reporting revenues of $872.3 million. Snap-on benefited from positive trends in the construction industry (ITB), which led to higher tool sales and commodity deflation and then to lower costs.
The slow-moving industrials (RGI) sector affected Snap-on’s Commercials and Industrials segment, where sales fell by 3.4%. SNA’s stock was down by 3.4% at market closing on July 21.
Stanley Black & Decker’s performance in terms of sales was better compared to Snap-on. Tyco International (TYC), SWK’s major competitor in the securities business, is slated to release its 3Q16 earnings on July 29.