Stanley Black & Decker, Inc. (SWK - Free Report) reported second-quarter 2023 adjusted loss of 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 38 cents per share. The bottom line decreased 106.2% year over year from the year-ago quarter’s figure of $1.77 per share due to lower sales.
Revenue Details
In the quarter under review, Stanley Black’s net sales were $4,158.9 million, reflecting a year-over-year decline of 5.3%. The Oil & Gas divestiture had a negative impact of 1% and lower volume affected sales 5%. However, the results benefited 1% from favorable pricing.
SWK’s top line outperformed the Zacks Consensus Estimate of $4,122 million.
Stanley Black reports net sales under two segments, namely Tools & Outdoor and Industrial. The segmental information is briefly discussed below:
Revenues from the Tools & Outdoor segment totaled $3,542.2 million, decreasing 5.4% year over year. Our estimate for segmental revenues was $3,465.4 million. Lower volumes affected sales 13% while pricing added 1% to sales growth.
Revenues from the Industrial segment grossed $616.7 million, decreasing 4.8% year over year. Our estimate for segmental revenues was $631.4 million. Forex woes had a negative impact of 1%, the Oil & Gas divestiture had an adverse impact of 7% and lower volumes had a negative effect of 1%. However, the segment gained 4% from effective pricing.
Margin Profile
In the reported quarter, Stanley Black’s cost of sales increased 1.3% year over year to $3,226.8 million. The gross profit decreased 22.8% to $932.1 million. The gross margin decreased 510 basis points (bps) to 22.4%.
Selling, general and administrative expenses decreased 1.8% year over year to $837.3 million. Operating profit was $94.8 million in the quarter, compared with $354.4 million reported in the year-ago quarter. The margin declined 580 bps to 2.3%.
Balance Sheet and Cash Flow
While exiting the second quarter, Stanley Black had cash and cash equivalents of $391.4 million, compared with $395.6 million reported at the end of fourth-quarter 2022. The long-term debt balance was $6,099.9 million, higher than $5,352.9 million reported at the end of fourth-quarter 2022.
In the first six months of 2023, net cash used in operating activities was $21.9 million, compared with $1,685.0 million cash used in the year-ago period. Capital and software expenditures totaled $136.5 million, down from $285.5 million reported in the year-ago period. Free cash outflow (before dividends) in the year was $158.4 million, compared with $1,970.5 million free cash outflow a year ago.
SWK paid out dividends worth $239.5 million to its shareholders, up 4% from the year-ago period. Purchases of common stock for treasury were $5.6 million, compared with $2,314.1 million in the year-ago period.
2023 Guidance Narrowed
Stanley Black anticipates earnings in the range of a loss of $1.25 per share to a loss of 50 cents per share for 2023, compared with a loss of $1.65 per share to earnings of 60 cents per share predicted earlier. Adjusted earnings are expected to be 70 cents-$1.30 per share, compared with the prior guidance of $0.00- $2.00 per share. The midpoint of the guided range — $1.00 — lies above the Zacks Consensus Estimate of adjusted earnings of 87 cents per share.
Free cash flow is expected to be $0.6 billion to $0.9 billion for 2023, compared with $0.5 billion to $1.0 billion predicted earlier.
Zacks Rank & Stocks to Consider
SWK currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
GEF delivered a trailing four-quarter earnings surprise of 7.7%, on average. GEF’s earnings estimates have increased 13.4% for fiscal 2023 in the past 60 days. Its shares have risen 5.6% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank #2 (Buy). CAT’s earnings surprise in the last four quarters was 14.3%, on average.
In the past 60 days, estimates for Caterpillar’s earnings have increased 1.4% for 2023. The stock has gained 44.5% in the past year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Stanley Black & Decker, Inc. (SWK - Free Report) reported second-quarter 2023 adjusted loss of 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 38 cents per share. The bottom line decreased 106.2% year over year from the year-ago quarter’s figure of $1.77 per share due to lower sales.
Revenue Details
In the quarter under review, Stanley Black’s net sales were $4,158.9 million, reflecting a year-over-year decline of 5.3%. The Oil & Gas divestiture had a negative impact of 1% and lower volume affected sales 5%. However, the results benefited 1% from favorable pricing.
SWK’s top line outperformed the Zacks Consensus Estimate of $4,122 million.
Stanley Black reports net sales under two segments, namely Tools & Outdoor and Industrial. The segmental information is briefly discussed below:
Revenues from the Tools & Outdoor segment totaled $3,542.2 million, decreasing 5.4% year over year. Our estimate for segmental revenues was $3,465.4 million. Lower volumes affected sales 13% while pricing added 1% to sales growth.
Revenues from the Industrial segment grossed $616.7 million, decreasing 4.8% year over year. Our estimate for segmental revenues was $631.4 million. Forex woes had a negative impact of 1%, the Oil & Gas divestiture had an adverse impact of 7% and lower volumes had a negative effect of 1%. However, the segment gained 4% from effective pricing.
Margin Profile
In the reported quarter, Stanley Black’s cost of sales increased 1.3% year over year to $3,226.8 million. The gross profit decreased 22.8% to $932.1 million. The gross margin decreased 510 basis points (bps) to 22.4%.
Selling, general and administrative expenses decreased 1.8% year over year to $837.3 million. Operating profit was $94.8 million in the quarter, compared with $354.4 million reported in the year-ago quarter. The margin declined 580 bps to 2.3%.
Balance Sheet and Cash Flow
While exiting the second quarter, Stanley Black had cash and cash equivalents of $391.4 million, compared with $395.6 million reported at the end of fourth-quarter 2022. The long-term debt balance was $6,099.9 million, higher than $5,352.9 million reported at the end of fourth-quarter 2022.
In the first six months of 2023, net cash used in operating activities was $21.9 million, compared with $1,685.0 million cash used in the year-ago period. Capital and software expenditures totaled $136.5 million, down from $285.5 million reported in the year-ago period. Free cash outflow (before dividends) in the year was $158.4 million, compared with $1,970.5 million free cash outflow a year ago.
SWK paid out dividends worth $239.5 million to its shareholders, up 4% from the year-ago period. Purchases of common stock for treasury were $5.6 million, compared with $2,314.1 million in the year-ago period.
2023 Guidance Narrowed
Stanley Black anticipates earnings in the range of a loss of $1.25 per share to a loss of 50 cents per share for 2023, compared with a loss of $1.65 per share to earnings of 60 cents per share predicted earlier. Adjusted earnings are expected to be 70 cents-$1.30 per share, compared with the prior guidance of $0.00- $2.00 per share. The midpoint of the guided range — $1.00 — lies above the Zacks Consensus Estimate of adjusted earnings of 87 cents per share.
Free cash flow is expected to be $0.6 billion to $0.9 billion for 2023, compared with $0.5 billion to $1.0 billion predicted earlier.
Zacks Rank & Stocks to Consider
SWK currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
GEF delivered a trailing four-quarter earnings surprise of 7.7%, on average. GEF’s earnings estimates have increased 13.4% for fiscal 2023 in the past 60 days. Its shares have risen 5.6% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank #2 (Buy). CAT’s earnings surprise in the last four quarters was 14.3%, on average.
In the past 60 days, estimates for Caterpillar’s earnings have increased 1.4% for 2023. The stock has gained 44.5% in the past year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Get the latest research report on CAT - FREE
Get the latest research report on SWK - FREE
Get the latest research report on GEF - FREE