Organic growth boosts Stanley in Q1
Stanley Black & Decker had a nice boost to report in the first quarter, which came from organic growth, primarily in its Tools & Storage business.
"The first quarter was an excellent start to 2017 for Stanley Black & Decker," said president and CEO James Loree. "We reported robust organic growth of 5% and a record 14.2% operating margin rate, a 110 basis point expansion. Our organic growth was led by 6% growth in Tools & Storage, with a 4% contribution from Industrial, while Security was modestly positive. We were particularly pleased to see Engineered Fastening exceed its growth projections based on better than expected automotive performance."
Net revenues for the quarter were $2.8 billion, up 5% over the prior year. This was driven by 5% organic growth and 3% from acquisitions, offset 1% by currency and 2% by divestitures.
Net earnings came in at $393.1 million, up from $189.4 million in the year-ago period.
"We continue to take strategic capital deployment actions for future growth while expanding our operating margin rate," added Loree. "During the quarter, we closed three important transactions which included adding iconic brands Lenox, Irwin and Craftsman to our strong portfolio of world-class brands and franchises. The sale of the majority of our Mechanical Security businesses allowed us to redeploy that capital into more fruitful growth opportunities. The company is now working intensely to invest in product, brand and commercialization for the Craftsman brand, and to successfully integrate Newell tools, as we remain focused on our diversified industrial portfolio strategy."
Stanley Black & Decker also updated its 2017 earnings per share outlook to $7.63 - $7.83 on a GAAP basis and $6.98 - $7.18 on an adjusted basis to reflect the sale of the majority of its Mechanical Security business and the purchase of the Craftsman brand and Newell Tools.
The company is now raising the ranges of its 2017 EPS outlook to $7.95 - $8.15 on a GAAP basis and to $7.08 - $7.28 on an adjusted basis, as it expects stronger full-year results, thanks largely to an improved outlook for its industrial businesses.