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Dec 31, 2019
Stanley Black & Decker Q4 2019 Earnings Report
Stanley Black & Decker announced fourth quarter and full year 2019 financial results.
Key Takeaways
Stanley Black & Decker reported Q4 2019 revenues of $3.7 billion, a 2% increase compared to the previous year. The diluted GAAP EPS was $1.32, and excluding charges, the diluted EPS was $2.18. The company delivered a strong 2019 overcoming approximately $445 million in external headwinds.
4Q'19 revenues totaled $3.7 billion, up 2% versus prior year.
4Q'19 operating margin rate was 11.8%; excluding charges 4Q'19 operating margin rate was 13.6%, up 30 basis points versus prior year.
4Q'19 diluted GAAP EPS was $1.32; excluding charges, 4Q'19 diluted EPS was $2.18.
The company reached an agreement to acquire Consolidated Aerospace Manufacturing, LLC (CAM) for up to $1.5 billion.
Stanley Black & Decker
Stanley Black & Decker
Stanley Black & Decker Revenue by Segment
Revenue by Segment
Tools & Outdoor Revenue
CapyFin.com Forward Guidance
Management expects 2020 EPS to be $8.05 To $8.35 on a GAAP basis and $8.80 - $9.00 on an adjusted basis. Free cash flow conversion is expected to approximate 90%-100% of GAAP Net Income, reflecting the impact of restructuring payments associated with the 2019 cost reduction program.
Positive Outlook
- 2019 cost reduction program benefit (~ +$0.95)
- Organic growth of approximately 3% (~+$0.40 to +$0.50)
- The organization is focused on delivering margin expansion in 2020 by realizing the benefits of our previously announced cost actions
- generating volume leverage to offset the carryover impacts from tariffs and currency.
- Stanley Black & Decker is well positioned to deliver sustained above-market organic growth, operating margin expansion, strong free cash flow conversion and top-quartile shareholder returns over the long-term.
Challenges Ahead
- Incremental tariffs and currency headwinds (~ -$0.60 to -$0.70)
- Tax rate, financing costs and other below the line items (~ -$0.25)
- The difference between 2020 GAAP and adjusted EPS guidance is $0.65 - $0.75, consisting of acquisition-related and other charges.
- These forecasted charges primarily relate to restructuring, deal and integration costs, as well as Security business transformation and key margin resiliency initiatives.
- Slowing global markets and the mid-year acceleration of tariff and currency-related inflation which resulted in $445 million of external headwinds.