Stanley Black & Decker Knocks It Out Of The Park

I guess I was right on Stanley Black & Decker SWK, but I didn't expect this kind of blow out quarter. The New Britain, Ct.-based company reported earnings of $1.05 per share on revenues of $2.41 billion, handily beating Wall Street estimates of 92 cents per share on revenues of $2.38 billion. The company also said that it sees 2011 earnings of $4.75-$5.00 per share, well above the $4.73 per share Wall Street expects. The company also mentioned in the press release that it expects to see at least $425 million in synergies from the merger with Black & Decker, as I had predicted in my earlier article. As time goes on, and these synergies continue to flow to the bottom line, free cash flow will increase, and will be used for shareholder friendly activities, like dividend raises, buybacks and accretive acquisitions. Stanley Black & Decker's President and CEO, John F. Lundgren, commented, “2010 was a landmark year for Stanley Black & Decker, driven largely by the significant progress we made in integrating Black & Decker. Notably, we were able to achieve 7% organic growth for the year on a pro forma basis amid an uncertain economic environment while continuing the integration in a manner that allowed us to exceed our original cost synergy targets. Our early success to date notwithstanding, we remain focused on effectively navigating the risks and challenges inherent in the integration projects that remain while embedding the Stanley Fulfillment System across the combined entity." Lundgren went on to say in the press release, "We realize that our continued success is dependent upon the ongoing integration of Black & Decker, which is now in a critical phase that includes intensive and often interdependent systems conversions as well as changes within our plant and distribution center networks. Creating additional shareholder value from the successful integration remains management's top priority.” Stanley Black & Decker is firing on all cylinders, and if we ever see a hint of a housing recovery, look out. Disclosure: no position in names mentioned.