Manufacturer Black & Decker Corp., Towson, MD, reported sales for the first quarter 2009 were down 28% to $1.1 billion. Profit was $4.9 million, down from $67.4 million in the first quarter 2008.
"End-market conditions, particularly in Europe and the automotive industry, continued to deteriorate sharply in the first quarter," Nolan Archibald, CEO, said. "As the global economy has contracted over the past year, we have intensified our efforts to reduce costs."
Sales in the Power Tools and Accessories segment decreased 23% for the quarter. In the U.S. Industrial Products Group, sales decreased 30% due to lower construction activity and retailer inventory reductions. Sales decreased at a mid single-digit rate in the U.S. Consumer Products Group, primarily due to significant orders for lawn and garden products shipped in late 2008 rather than early 2009.
European sales decreased nearly 30%. Economic conditions in the region deteriorated rapidly, especially in Eastern Europe. Sales were flat in Latin America and declined at a double-digit rate in Asia, as economies in these regions slowed. The segment's operating margin decreased to 3.9%, as volume de-leveraging, cost inflation and unfavorable mix were only partly offset by cost reductions.
Sales in the Hardware and Home Improvement segment decreased 19% for the quarter. In the U.S. lockset business, sales decreased more than 20%, reflecting declines in residential construction and in retail sales for higher-priced products. Sales in the U.S. Price Pfister business decreased at a double-digit rate, due to both the housing downturn and weaker demand at retail.
In the Fastening and Assembly Systems segment, sales decreased 34% for the quarter. Sales to the global automotive industry fell nearly 40%, slightly less than the decline in automotive production. Sales were also down sharply in the industrial business, as global manufacturing slowed significantly.