As goes the housing market, so goes Black & Decker Corp.
When new home construction and home remodeling were on the rise in the past several years, business was booming at the power tool and accessories manufacturer.
But as activity in the sectors slowed this year, so have Black & Decker?s numbers.
“As this stimulus now fades, Black & Decker must rely more on its increasingly flexible cost structure and exposure to other geographies and end markets like nonresidential construction,” said Matthew Warren, a stock analyst who watches Black & Decker at Morningstar Inc.
“After two years of rapid sales gains, we expect growth to slow dramatically in 2006 and actually decline in 2007. We now project only 1 percent compound annual growth over the next five years.”
Roger Young, vice president of investor and media relations at Black & Decker, however, declined to make predictions for the company?s future.
“I don?t know if we ever would have predict the type of boom that we had in the construction and remodeling industries that we saw in [2004 and 2005],” he said. “But over time we do expect solid organic sales growth. In terms of timing, it?s hard to predict.”
