Power tool maker The Black & Decker Corporation announced that net earnings from continuing operations for the fourth quarter of 2005 were U.S. $101.8 million, or $1.28 per diluted share. Excluding $51.2 million of incremental tax expense to repatriate foreign earnings under the American Jobs Creation Act of 2004, net earnings from continuing operations were $1.93 per diluted share, a 21-percent increase from $1.60 in the fourth quarter of 2004.
For the full year 2005, net earnings from continuing operations were a record $544.0 million, or $6.69 per diluted share. Excluding the incremental tax expense in the fourth quarter and a favorable insurance settlement in the first quarter, net earnings from continuing operations were $6.88 per diluted share, a 27-percent increase from $5.40 in 2004.
Sales from continuing operations increased slightly for the quarter to a record $1.7 billion, including a 1 percent negative impact of foreign currency translation. For the full year, sales increased 21 percent to a record $6.5 billion.
According to Nolan D. Archibald, chairman and CEO, sales in the Power Tools and Accessories segment increased 2 percent for the quarter and 26 percent for the full-year period. The U.S. Industrial Products Group grew sales at a mid single-digit rate, driven by a double-digit growth rate for DEWALT(R) tools and accessories.
For the quarter, sales in the U.S. Black & Decker consumer business decreased slightly, due to order patterns that drove a double-digit rate of increase in the third quarter. European sales decreased at a mid single-digit rate and fell short of our expectations due to a weaker economic environment in the United Kingdom. For the full year, the U.S. businesses posted a double-digit rate of increase for DEWALT and a mid single-digit growth rate in the consumer division. Full-year margins of existing businesses increased significantly in all geographic regions, and exceeded 10 percent in Europe.
Black & Decker said it expects diluted earnings per share from continuing operations in the range of $7.20 to $7.40 for the full year 2006, which includes approximately $0.15 per share of incremental expense associated with adoption of the new accounting standard for stock-based compensation, which was not included in 2005 earnings and is not reflected in several analysts' estimates.
"Despite an earnings per share (EPS) increase exceeding 30 percent in the first half of 2005, we expect to deliver growth again in the first half of 2006 and more than 10 percent EPS growth in the second half," Archibald said. "We consider this a solid increase on top of the exceptional gains of the past 4 years. By executing our proven strategy to consistently grow earnings, we believe we can deliver superior returns to our investors."
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