Stanley Black & Decker is encouraged by Q2 results

Apples-to-apples comparisons are difficult for Stanley Black & Decker's second-quarter performance. The company's earnings include one-time payments related to its merger and also combined results of the two giants. But here's one reason executives are encouraged: Net sales jumped to $2.37 billion, up from $919 million in the same quarter last year.

The company's net earnings from continuing operations of $45.8 million were hurt by a one-time merger-related charge of $160.3 million. Last year's net earnings were $69.5 million.

Stanley Works and Black & Decker completed their merger in March.

“We continue to be encouraged by how well the integration with Black & Decker is progressing, and we remain firmly on track with our cost synergy estimate of $350 million, $90 million of which will be recognized in 2010," said president and CEO John Lundgren.

In the Construction & DIY segment (CDIY), sales jumped to $1.32 billion, up from $324 million in the second quarter of 2009.

Within this segment, hand tools and storage grew 5%. And the company pointed to a "successful launch" of a new line of Bostitch-branded hand tools as a positive factor in sales and profits.

In Professional Power Tools & Accessories, sales rose in the high teens with more than 70% sales growth in the compact cordless lithium ion product line versus the prior year.

Consumer Products Group sales rose in the mid-single digits, boosted by continued success with the Tradesman line and new products in the outdoor product portfolio.

Despite the runaway sales figures, senior VP and CFO Donald Allan Jr. alluded to a bumpy rebound for end markets. “While we were encouraged to see strong top- and bottom-line growth in the second quarter, our belief that the rebound within the end markets we serve will be slow and perhaps bumpy remains unchanged," he said. "When you strip out the estimated amount of customer restocking activity that took place in the quarter, end user demand growth appeared to be in the range of 4% to 5%, which we believe will remain consistent for the remainder of the year. While commodity inflation in the second half of 2010 remains a likely headwind, we are confident in our ability to offset much of this over time with ongoing productivity programs and pricing actions. We are looking forward to realizing the benefits of the cost synergies we have forecasted for the year as they will provide support to our profitability.”

The company is updating its 2010 full-year earnings per share guidance from the prior range of $3.10 to $3.30 to a range of $3.35 to $3.55, which excludes the 21-cent positive Q2 tax-related benefit and the impact of one-time charges.