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Black & Decker: Housing Slump to Go Through 2008
January 28, 2008
Black &Decker Corp., Towson, MD, reported sales for the fiscal year 2007 were up 2% to $6.6 billion. Profit for the year was $518.1 million, up from $486 million in the prior year.
For the fourth quarter 2007, sales were up 3% to $1.7 billion. Profit was $187.4 million, up from $95.7 million in the prior-year quarter.
Business conditions continued to deteriorate during the fourth quarter of 2007," said Nolan D. Archibald, CEO. "For the year, U.S. housing starts were down approximately 25% and we encountered severe commodity cost pressure, both significantly worse that we expected early in 2007.
"… While demand in our U.S. markets has been weak, we are pleased with the outstanding results in our international businesses and our sixth straight record year of free cash flow."
Sales in Power Tools and Accessories decreased 2% for the quarter. For the full year, sales were down 1%. In the U.S. Industrial Products Group, sales fell at a "low single-digit rate," reflecting weak market conditions and returns of recalled product. For the year, sales fell at a "mid single-digit" rate.
The U.S. Consumer Products Group sales fell at a double-digit rate, with declines in most key product lines. Sales for the year fell at a "high single-digit" rate.
"Throughout the North American business, our customers continued to manage inventory levels cautiously," Archibald said.
In Europe, sales were up at a single-digit rate, and sales in the rest of the world increased at a double-digit rate, led by Latin America.
In Hardware and Home Improvement, sales decreased 4% for the quarter. For the full year, sales fell 1%.
Sales in the Fastening and Assembly Systems segment increased 6% for the quarter and 4% for the full year, led by strong performance in Asia and Europe.
Black &Decker does not expect a housing recovery in 2008. "While our international momentum and new product pipeline remain strong, we are forecasting that organic slaes will decline at a low single-digit rate in 2008," Archibald said.
Black &Decker is a manufacturer of power tools and accessories, hardware and home improvement products, and technology-based fastening systems.