Stanley Black & Decker Inc. (SWK, -0.03%) saw its shares jump 2.1% in premarket trading on Friday, rebounding from a five-month low. The tools manufacturer reported third-quarter profit that exceeded expectations and raised its full-year outlook, citing cost-cutting measures as a significant contributor to its success.
Impressive Financial Performance
Net income for the company dropped to $4.7 million, or 3 cents per share, compared to $844.6 million, or $5.50 per share, in the same period last year. However, after adjusting for nonrecurring items, the adjusted earnings per share stood at $1.05, surpassing the consensus estimate of 83 cents provided by FactSet.
Though the revenue declined by 4% to $3.95 billion, slightly below FactSet’s projected $3.99 billion, Stanley Black & Decker managed to achieve impressive results amid challenging market conditions. Sales for both the company’s tools and outdoor and industrial businesses also experienced a 4% decline.
Raised Full-Year Outlook
Despite the drop in revenue, Stanley Black & Decker displayed confidence by raising its guidance range for adjusted earnings per share in 2023. The company now expects the adjusted EPS to be between $1.10 and $1.40, up from the previous range of 70 cents to $1.30.
Focus on Cost Reduction
Stanley Black & Decker’s Chief Financial Officer, Patrick Hallinan, highlighted the success of the company’s cost reduction program. The program has already generated $880 million in inventory reduction and $675 million in pre-tax run-rate cost savings year-to-date, surpassing initial expectations.
Stanley Black & Decker’s stock has experienced a 21.5% decline over the past three months, while the S&P 500 (SPX, -1.18%) has dropped by 8.8% during the same period.
In summary, Stanley Black & Decker’s third-quarter financial results have exceeded expectations, thanks to their strong cost reduction program. The company remains optimistic about its future performance, as demonstrated by the raised full-year outlook.