Stanley Black & Decker Q2 2022 Earnings Report
Key Takeaways
Stanley Black & Decker reported second-quarter revenues of $4.4 billion, a 16% increase compared to the prior year, driven by acquisitions in outdoor power equipment and price realization. The company is implementing a global cost reduction program expected to deliver pre-tax savings of $1 billion by the end of 2023 and grow to approximately $2 billion within 3 years. The company updated its full-year 2022 diluted GAAP EPS guidance range to $0.80 - $2.05 and adjusted diluted EPS to $5.00 - $6.00.
Second quarter revenues were $4.4 billion, up 16% versus prior year, led by acquisitions in outdoor power equipment and price realization.
Second quarter diluted GAAP EPS was $0.51; excluding charges, adjusted diluted EPS was $1.77.
Stanley Security and Access Technologies divestitures both closed in July 2022, with total cash proceeds of $4.1 billion, reducing debt balances in the third quarter.
The company is updating full year 2022 diluted GAAP EPS guidance range to $0.80 - $2.05 (from $7.20 - $8.30); adjusted diluted EPS to $5.00 - $6.00 (from $9.50 - $10.50).
Stanley Black & Decker
Stanley Black & Decker
Stanley Black & Decker Revenue by Segment
Forward Guidance
Stanley Black & Decker is revising its 2022 EPS outlook to $0.80 to $2.05 on a diluted GAAP basis from $7.20 to $8.30, and on a Non-GAAP adjusted basis to $5.00 to $6.00 from $9.50 to $10.50. Free cash flow is expected to be $0.4 to $1.0 billion in the back half including tax payments of $0.5 to $0.6 billion associated with Security divestitures. Excluding such payments, cash generation is expected to be $1.0 to $1.5 billion driven by working capital reductions.
Positive Outlook
- The company is focused on serving its customers by improving power tool supply while reducing inventory in other categories.
- Stanley Black & Decker remains focused on disciplined capital allocation, and intends to balance share repurchase activity with its commitment to dividends and strong investment grade credit ratings.
- 2022 Impact from cost savings initiatives (+$0.80 - $1.00)
Challenges Ahead
- Lower second half revenue, primarily driven by slowing consumer demand in Tools & Outdoor and moderated expectations for price (-$4.25)
- Currency translation, other below the line items and second quarter performance (-$0.55)
- Impact from plant production curtailments (-$0.50 - $0.70)