Stanley Black & Decker reports EPS in-line, misses on revs; lowers FY13 guidance below consensus
Reports Q3 (Sep) earnings of $1.39 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $1.39; revenues rose 9.6% year/year to $2.76 bln vs the $2.82 bln consensus; volume (+5%) and acquisitions (+7%), partially offset by price (-1%) and currency (-1%).
Co issues downside guidance for FY13, lowers EPS to $4.90-5.00, excluding non-recurring items, from $5.40-5.65 vs. $5.44 Capital IQ Consensus as a result of slower margin rate recovery within the Security segment, weakening emerging markets and the impact of the U.S. government shutdown on organic growth.
"Growth was robust across the portfolio with our CDIY and Industrial segments posting another strong organic growth quarter, and with the exception of Europe, Security also achieved solid, mid-single digit organic growth. Within Security, we are gaining further traction with our verticals initiative based on recent order activity and are encouraged by the sequential growth and margin improvements in this segment during the quarter. However, the achievement of high teen margins, which we believe represent the appropriate level given the characteristics of this business, is taking longer than anticipated.
"the year-to-date performance of our Security business has created pressure on our results which has, along with lower organic growth expectations within certain businesses and geographies, caused us to revise our full year 2013 earnings and free cash flow outlook. The actions we have taken and are executing to address the Security segment's margin performance will enable us to increase Security margins to levels that are more closely aligned to historical results. We remain focused and committed to attaining our long-term financial goals and 2016/2017 vision enabled by our disciplined focus on organic growth initiatives, our commitment to allocating capital in ways that provide excellent returns for our shareholders, and our proven capabilities of driving efficiencies and streamlining our operations via the Stanley Fulfillment System. Assuming that the level of volatility and current uncertainty in the markets we serve does not worsen in 2014 and based on our path to recovery in Security, we see conditions in 2014 that support our long-term 4%-6% organic growth expectations and 2014 EPS growth, excluding charges, ranging from 7% - 9%."
