Black & Decker (BDK) said earnings fell from a year ago but sales rose 1%.
The Towson, Md., toolmaker made $113 million, or $1.45 a share, down from the year-ago continuing operations profit of $144 million, or $1.74 a share. Sales rose to $1.53 billion from $1.52 billion a year earlier. Analysts surveyed by Thomson Financial were looking for a profit of $1.39 a share on sales of $1.54 billion.
The March acquisition of Vector Products contributed 1% to sales in the quarter, effectively offsetting the impact of the Flex business divestiture in late 2005. Foreign currency translation had a negative 2% impact on sales.
Free cash flow was negative $23 million for the quarter, vs. a positive $40 million in the prior year. This comparison was affected by an income tax payment in 2006 related to repatriation of foreign earnings and by a large insurance settlement received in 2005. Excluding these one-time items, free cash flow increased more than $30 million vs. the prior year.
"Black & Decker increased sales and operating income in all three business segments, despite commodity cost inflation and a particularly challenging comparison to prior-year results," said CEO Nolan Archibald. "We continue to benefit from cost reduction efforts and effective use of our strong free cash flow. By beating our sales target and increasing operating margin 60 basis points, we had solid growth in operating profits and exceeded our EPS guidance."
The company guided to second-quarter earnings of $1.95-$2 a share, in line with the Thomson Financial estimate, and full-year profit of $7.30 to $7.45 a share, against a $7.35 Thomson target.