Black & Decker Corp., the brand in demand in the home construction and remodeling industries, is losing a bit of its luster.
Third-quarter profits at the Towson-based power-tool maker fell 9 percent as the number of new housing starts fell.
“Black & Decker grew [earnings-per-share] in line with our expectations this quarter, despite a less robust demand environment and ongoing commodity cost pressure,” chairman and Chief Executive Officer Nolan Archibald said in a release.
Roger Young, Black & Decker?s vice president for investor and media relations, said commodities such as copper and zinc, used to make the company?s hardware and home improvement products, “rose dramatically” during the third quarter.
The company said its net income fell from $137.8 million, or $1.70 per share, a year ago to $125.1 million, or $1.74 per share, this year. It will pay dividends of 38 cents per share on Dec. 29 to shareholders of record at the close of business on Dec. 15.
During the third quarter, Black & Decker repurchased about 6.1 million shares of its stock at an average price of $71 per share. That brings its year-to-date repurchase of stock to 10.1 million shares.
At midday Thursday, shares in Black & Decker were trading at $83.91, up 3.46 percent. Its 52-week high was $94.90, and its 52-week low was $66.04. Its Zack average brokerage recommendation was “moderate buy,” up from a “hold” in August.
Matthew Warren, a stock analyst who watches Black & Decker for the research firm Morningstar Inc., said the rapid run-up in house construction and homebuying in recent years built up its earnings.
“There?s no doubt the residential construction and remodeling booms have juiced results,” Warren said.
The U.S. Census Bureau and U.S. Department of Housing and Urban Development reported that building permits for privately owned housing units in September fell 6.3 percent from the August, and 27.7 percent below the same month in 2005.
