dewalt tools : Black & Decker Sales Slip

Although Black & Decker reported a higher second-quarter profit, sales slipped and the tool maker cut its full-year earnings forecast blaming a more modest U.S. economic climate.

The manufacturer of DeWalt drills, Kwikset locks and Price Pfister faucets said operating profit margins would likely decline in the third quarter because of higher costs of oil and raw materials. It said price increases were planned for later this year.

Sales growth in power tools is slowing down somewhat but the real story is weakness in locksets and faucets, due to a slowing down of construction activity in the U.S. and higher raw materials costs, said one industry analyst. Black & Decker has benefited in recent years from a boom in U.S. construction spending, but that is now changing.

The company said second-quarter earnings from continuing operations totalled $152.2 million, up from $150.9 million a year earlier. Sales were $1.697 billion, down slightly from $1.699 billion a year earlier, as growth slowed in Black & Decker's three major divisions. In the key power tools segment, sales were up just 1 percent, compared with a 35 percent rise in the year-earlier quarter, as consumer products group sales fell. Black & Decker said some retailers cut inventory. Hardware and home improvement sales fell 6 percent as key lockset retailers did not increase orders.

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