Stanley Black & Decker: Stock Jumps with Guidance Boost
SWK’s top line in 1Q16
Stanley Black & Decker (SWK) delivered a surprising operating performance for the quarter ending March 31, 2016. Buoyed by an organic growth of 5%, SWK’s sales figures topped $2.7 billion in the quarter. The company’s reported revenues beat consensus sales estimates by $106 million. Organic growth was led by a healthy volume growth of 4% and a 1% rise in realized prices. As in most previous quarters, acquisition-related growth was flat in 1Q16.
With more than half of its sales located outside the United States, SWK’s revenues were dragged down by 3% due to the stronger dollar. However, the impact of foreign exchange translations was far greater in 1Q15, at 7%.
Adjusted earnings per share
In 1Q16, SWK’s net profits surged by 16.7% year-over-year to $189.4 million, primarily due to lower restructuring charges. Restructuring charges in the quarter totaled $8 million, compared with $24.9 million in 1Q15. The company’s diluted earnings per share were boosted by a lower share count and restructuring benefits. SWK had a total of 147.6 million outstanding shares, compared with 156.5 million a year ago. The company’s adjusted earnings per share increased by 19.6% to $1.28 against estimates of $1.14.
Investors interested in trading in the industrial space could look into the Guggenheim S&P 500 Equal Weight Industrials ETF (RGI), and those interested in trading in dividend-based ETFs could consider the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). Major holdings in NOBL are Nucor (NUE) and Illinois Tool Works (ITW), with respective weights of 2.5% and 2.3%.
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