Tool maker The Stanley Works reports earnings for the second quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Tool makers are struggling with slowing construction and consumer confidence, particularly in the U.S., where the housing market has waned and consumers are postponing renovation projects.
The New Britain, Conn.-based maker of tools for professionals and do-it-yourselfers said earlier in the year that it believed that organic revenue would shrink in the first half of this year.
But this spring, executives said if the market does not stabilize in the second half, the company has developed "contingency plans primarily involving cost reductions."
During the second quarter, the company agreed to sell its CST/Berger laser leveling and measuring business for $205 million to the German company Robert Bosch Tool Corp. Separately, Stanley Works bought security company Sonitrol Corp. for $275 million in cash in a move designed to increase its security offerings.
That deal is expected to close in the third quarter.
Stanley Works also said it will exit several other, undisclosed, businesses with revenue of about $60 million.
It expects to post pretax restructuring, impairment and severance charge of $10 million to $20 million on the transactions.
BY THE NUMBERS: Analysts polled by Thomson Financial predict a profit of $1.02 per share on revenue of $1.13 billion for the quarter.
ANALYST TAKE: Deutsche Bank analyst Nigel Coe reduced his full-year profit estimate for the company to $3.90 per share, down 5 percent. "This is due to a revision in our expectations for this year's portfolio realignment and restructuring charges," he wrote in a research note.
WHAT'S AHEAD: Change in the volume of construction and do-it-yourself projects will be an important indicator of the U.S. economy and its effect on the company's largest business segment.
STOCK PERFORMANCE: During the quarter, which began April 1, shares fell about 5 percent to end the period at $44.83. Shares are down about 8 percent for the year.
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