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NEW BRITAIN, Conn. (AP) - Hand tool maker Stanley Works on Thursday cut its 2009 earnings forecast to account for a charge stemming from its planned $4.5 billion purchase of rival Black&Decker Corp.
Shortly after the market closed Thursday, Stanley said it expects to record a one-time charge in the fourth quarter of 2009 of $18 million, reflecting fees and expenses for buying Black&Decker. Most of the fees and expenses will be non tax-deductible.
As a result of the charge, Stanley lowered its full-year per-share earnings outlook to a range of $2.61 to $2.71 from its earlier range of $2.84 to $2.94.
Analysts surveyed by Thomson Reuters expect, on average, $2.58 per share.
Management reiterated its expectation of 40 percent gross margins and free cash flow greater than $300 million for the full year. The revised guidance does not reflect any change in Stanley's operational outlook.
On Wednesday the two companies said Stanley shareholders will own about 50.5 percent of the combined company, which would be the nation's largest tool maker and be named Stanley Black&Decker.
Black&Decker shareholders will own about 49.5 percent after the all-stock deal is complete.
Stanley shares rose $1.17, or 2.4 percent, in regular session trading to settle at $49.62. Black&Decker added $1.45, or 2.5 percent, to close at $61.48.
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