Stanley Black & Decker Stock Slides After FY21 Outlook Cut

  • Stanley Black & Decker, Inc. SWK reported third-quarter FY21 revenue growth of 10.7% year-over-year to $4.26 billion, +10% on an organic basis, beating the consensus of $4.24 billion.
  • Tools & Storage segment sales were $3.19 billion (+13.6% Y/Y), and segment profit margin of 15.2%, down by 610 bps.
  • Industrial segment sales were $593.5 million (+1.2% Y/Y), and segment profit margin of 7.4% down by 350 bps.
  • Security segment sales were $483.8 million (+5.3% Y/Y), and segment profit margin of 8.2% down by 40 bps.
  • Adjusted EPS decreased to $2.77 compared to $2.89 in 3Q20, beating the consensus of $2.47.
  • The gross margin contracted by 311 bps to 32.6%. The adjusted operating profit decreased by 23.4% Y/Y to $521.5 million, and the margin contracted by 544 bps to 12.2%.
  • Stanley Black & Decker generated cash from operating activities year-to-date of $291.2 million, compared to $600.2 million a year ago. Free cash outflow of $31.3 million.
  • FY21 Outlook: Stanley Black & Decker expects organic revenue growth of 16%-17%, GAAP EPS of $10.20-$10.45 (prior expectation $10.80-$11.20); and Adjusted EPS of $10.90-$11.10 (prior $11.35-$11.65) vs. consensus of $11.54.
  • It expects a Free cash flow of $1.1 billion - $1.3 billion due to an expectation for higher inventory levels.
  • Price Action: SWK shares are trading lower by 5.06% at $176.80 during the premarket session on Thursday.
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