The New York Times-20080129-Tool Makers Offer Dim Forecasts

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Tool Makers Offer Dim Forecasts

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Two tool makers, the Black & Decker Corporation and Stanley Works, offered dim forecasts for 2008 on Monday as a slowdown in the housing market has stifled demand for building equipment.

Black & Decker, which makes DeWalt power tools and Price Pfister faucets, offered a first-quarter profit outlook that was lower than Wall Street forecasts, and Stanley Works cited a possible mild and short-lived U.S. recession, for its full-year sales growth forecast of flat to up 1 percent.

Black & Decker forecast earnings of $1.10 to $1.20 a share for the first quarter, while analysts surveyed by Reuters Estimates, on average, were expecting $1.40.

We recognize that the U.S. economy is slowing, and we do not expect a housing recovery in 2008, the chief executive, Nolan D. Archibald, said in a statement.

The company reported a fourth-quarter profit of $187.4 million, or $2.94 a share, up from $95.7 million, or $1.38 a share, a year earlier. Excluding one-time items, however, profit fell to $1.06 a share from $1.38. The analysts' average forecast was $1.03, according to Reuters Estimates. Sales rose 3 percent, to $1.7 billion.

An analyst at the investment firm Sterne, Agee & Leach, Nicholas P. Heymann, said investors were concerned about the home remodeling outlook. When the economy slows, remodeling picks up as people renovate their homes rather than build new ones, he said. But the credit squeeze is making it more difficult for homeowners to get loans, even for remodeling projects.