SWK Issues $750M Debentures


Stanley Black & Decker, Inc.(SWK) recently issued junior subordinated debentures worth $750 million; maturing on July 25, 2052. The issue was offered at $25 per debentures or 100% of principal amount.

The debentures carry a coupon rate of 5.75% to be paid quarterly by the company, with the first installment accruing on September 15, 2012. The debentures carry a Baa2 rating from Moody’s, BBB+ from S&P and BBB from Fitch.

In the recently reported second quarter 2012 results, the company reported a 0.6% sequential increase in its long-term debt balance (net of current portions) which settled at approximately $2.9 billion. Net interest expense in the quarter rose 20.5% to $32.3 million.

Also, the quarter’s earnings per share from continuing operations came in at $1.32, down 9.6% from $1.46 reported in the year-ago quarter. GAAP EPS including 40 cents of merger related charges was 92 cents compared with $1.14 in the second quarter of 2011. Net revenue increased 8.1% year over year to roughly $2.8 billion, due primarily to a 1% unit volume improvement, a 1% positive price impact and 10% positive impact from acquisitions. These were, however, offset by a 4% negative currency translation impact.

The current Zacks Consensus Estimate for the third quarter of 2012 is $1.60, representing a year-over-year increase of 19.48%. Estimates for the fiscal years 2012 and 2013 are $5.60 and $6.55, reflecting annual growth of 6.87% and 16.93%, respectively.

Stanley Black & Decker manufactures tools and engineered security solutions across the globe. Prime competitors of the company are Danaher Corp. (DHR), Makita Corp. (MKTAY), and Snap-on Inc. (SNA).

We currently maintain a Neutral recommendation on Stanley Black & Decker. The stock also bears a Zacks #5 (Strong Sell) Rank.

Read the Full Research Report on MKTAY

Read the Full Research Report on DHR

Read the Full Research Report on SWK

Read the Full Research Report on SNA

Zacks Investment Research

More From Zacks.com
View Comments (0)