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Stanley Black (SWK) Q3 Earnings & Revenues Surpass Estimates
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Stanley Black & Decker, Inc. (SWK - Free Report) reported impressive third-quarter 2022 results. SWK’s earnings beat the Zacks Consensus Estimate by 4.1% and sales beat the same by 0.1%.
In the reported quarter, SWK’s adjusted earnings were 76 cents per share, beating the Zacks Consensus Estimate of 73 cents. However, the bottom line decreased 72.6% from the year-ago quarter’s $2.77.
Revenue Details
In the quarter under review, Stanley Black’s net sales were $4,119.6 million, reflecting year-over-year growth of 9%. The results benefited 16% from acquired assets and 8% from favorable pricing. Foreign currency translation had an adverse impact of 4%, and lower volume affected sales 10%.
SWK’s top line beat the Zacks Consensus Estimate of $4,116 million.
Stanley Black reports net sales under two segments, namely Tools & Outdoor and Industrial. The segmental information is briefly discussed below:
Revenues from Tools & Outdoor totaled $3,494.7 million, rising 9.7% year over year. Acquisitions (Excel and MTD) contributed 18% and pricing added 7% to sales growth, while adverse foreign-currency translations lowered sales 3%. Lower volumes affected 12%.
Revenues from Industrial grossed $624.8 million, increasing 5.3% year over year. The segment gained 5% from higher volumes and 9% from effective pricing. Forex woes had a negative impact of 6% and the Oil & Gas divestiture had a negative effect of 3%.
In the reported quarter, Stanley Black’s cost of sales increased 21% year over year to $3,101.5 million. The metric represented 75.3% of the quarter’s net sales compared with 67.8% in the year-ago quarter. The gross profit decreased 16.2% to $1,018.1 million. The gross margin decreased 750 basis points (bps) to 24.7%.
Selling, general and administrative expenses increased 3.4% year over year to $799.8 million. The metric represented 19.4% of net sales in the reported quarter compared with 20.5% in the year-ago period. Operating profits decreased 50.6% to $218.3 million. The margin declined 640 bps to 5.3%.
The adjusted tax rate in the reported quarter was 1.3%.
Balance Sheet and Cash Flow
While exiting the third quarter, Stanley Black had cash and cash equivalents of $408.7 million, up 187.6% from $142.1 million reported at the end of fourth-quarter 2021. The long-term debt balance increased 22.9% to $5,350.5 million from $4,353.6 million reported at the end of fourth-quarter 2021.
In the first nine months of 2022, net cash used in operating activities was $2,110.6 million against $291.2 million generated in the year-ago period. Capital and software expenditures totaled $399.9 million, up from $322.5 million reported in the year-ago period. Free cash outflow (before dividends) in the first nine months of the year was $2,510.5 million compared with $31.3 million free cash outflow a year ago.
During the same time period, Stanley Black spent $72.1 million net of cash acquired on business buyouts. SWK paid out dividends worth $345.8 million to its shareholders, down 0.5% from the year-ago period. Purchases of common stock for treasury were $2,318.7 compared with $20.1 million in the year-ago period.
Outlook
Stanley Black revised its outlook for 2022. The company now anticipates adjusted earnings per share of $4.15-$4.65 per share compared with $5.00-$6.00 per share guided previously. The Zacks Consensus Estimate for 2022 adjusted earnings stands at $5.46.
Earnings are predicted to be 10 cents-80 cents per share compared with 80 cents-$2.05 anticipated earlier. The difference between 2022 EPS and adjusted EPS guidance is $3.85-$4.05, which includes acquisition-related and other charges.
Free cash flow is expected to be $0.3 to $0.6 billion for fourth-quarter 2022.
Zacks Rank & Stocks to Consider
Stanley Black currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 23.3% in the past six months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.5% in the past six months.
Titan International, Inc. presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 0.1% for 2022. The stock has jumped % in the past six months.
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Stanley Black (SWK) Q3 Earnings & Revenues Surpass Estimates
Stanley Black & Decker, Inc. (SWK - Free Report) reported impressive third-quarter 2022 results. SWK’s earnings beat the Zacks Consensus Estimate by 4.1% and sales beat the same by 0.1%.
In the reported quarter, SWK’s adjusted earnings were 76 cents per share, beating the Zacks Consensus Estimate of 73 cents. However, the bottom line decreased 72.6% from the year-ago quarter’s $2.77.
Revenue Details
In the quarter under review, Stanley Black’s net sales were $4,119.6 million, reflecting year-over-year growth of 9%. The results benefited 16% from acquired assets and 8% from favorable pricing. Foreign currency translation had an adverse impact of 4%, and lower volume affected sales 10%.
SWK’s top line beat the Zacks Consensus Estimate of $4,116 million.
Stanley Black reports net sales under two segments, namely Tools & Outdoor and Industrial. The segmental information is briefly discussed below:
Revenues from Tools & Outdoor totaled $3,494.7 million, rising 9.7% year over year. Acquisitions (Excel and MTD) contributed 18% and pricing added 7% to sales growth, while adverse foreign-currency translations lowered sales 3%. Lower volumes affected 12%.
Revenues from Industrial grossed $624.8 million, increasing 5.3% year over year. The segment gained 5% from higher volumes and 9% from effective pricing. Forex woes had a negative impact of 6% and the Oil & Gas divestiture had a negative effect of 3%.
Stanley Black & Decker, Inc. Price and Consensus
Stanley Black & Decker, Inc. price-consensus-chart | Stanley Black & Decker, Inc. Quote
Margin Profile
In the reported quarter, Stanley Black’s cost of sales increased 21% year over year to $3,101.5 million. The metric represented 75.3% of the quarter’s net sales compared with 67.8% in the year-ago quarter. The gross profit decreased 16.2% to $1,018.1 million. The gross margin decreased 750 basis points (bps) to 24.7%.
Selling, general and administrative expenses increased 3.4% year over year to $799.8 million. The metric represented 19.4% of net sales in the reported quarter compared with 20.5% in the year-ago period. Operating profits decreased 50.6% to $218.3 million. The margin declined 640 bps to 5.3%.
The adjusted tax rate in the reported quarter was 1.3%.
Balance Sheet and Cash Flow
While exiting the third quarter, Stanley Black had cash and cash equivalents of $408.7 million, up 187.6% from $142.1 million reported at the end of fourth-quarter 2021. The long-term debt balance increased 22.9% to $5,350.5 million from $4,353.6 million reported at the end of fourth-quarter 2021.
In the first nine months of 2022, net cash used in operating activities was $2,110.6 million against $291.2 million generated in the year-ago period. Capital and software expenditures totaled $399.9 million, up from $322.5 million reported in the year-ago period. Free cash outflow (before dividends) in the first nine months of the year was $2,510.5 million compared with $31.3 million free cash outflow a year ago.
During the same time period, Stanley Black spent $72.1 million net of cash acquired on business buyouts. SWK paid out dividends worth $345.8 million to its shareholders, down 0.5% from the year-ago period. Purchases of common stock for treasury were $2,318.7 compared with $20.1 million in the year-ago period.
Outlook
Stanley Black revised its outlook for 2022. The company now anticipates adjusted earnings per share of $4.15-$4.65 per share compared with $5.00-$6.00 per share guided previously. The Zacks Consensus Estimate for 2022 adjusted earnings stands at $5.46.
Earnings are predicted to be 10 cents-80 cents per share compared with 80 cents-$2.05 anticipated earlier. The difference between 2022 EPS and adjusted EPS guidance is $3.85-$4.05, which includes acquisition-related and other charges.
Free cash flow is expected to be $0.3 to $0.6 billion for fourth-quarter 2022.
Zacks Rank & Stocks to Consider
Stanley Black currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered a four-quarter earnings surprise of 3.4%, on average. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 23.3% in the past six months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
In the past 60 days, iRobot’s earnings estimates have increased 0.1% for 2022. The stock has rallied 11.5% in the past six months.
Titan International, Inc. presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 0.1% for 2022. The stock has jumped % in the past six months.