DOW JONES NEWSWIRES 
 

Black & Decker Corp.'s (BDK) first-quarter net income plunged 93% as a continued steep sales slide walloped the bottom line.

The toolmaker and home-improvement products company also cut its full-year earnings outlook, noting the impact of the stronger dollar and higher interest costs. The view was lowered to $1.50 to $1.90 a share from $1.75 to $2.25.

For the second quarter, Black & Decker expects earnings of 35 cents to 45 cents a share. Analysts' mean estimate was 42 cents a share, according to a survey by Thomson Reuters.

"We expect that the weak demand we saw in the first quarter will continue," said Chairman and Chief Executive Nolan D. Archibald.

He attributed the weaker-than-expected sales in the first quarter to sharply deteriorating markets, especially in Europe and the auto industry. Stepped-up cost-cutting, however, helped to reduce overhead costs 23% and mitigate the sales woes somewhat.

The outlook for U.S. home-improvement products is gloomy, with 2009 product sales seen heading for their first three-year decline since record-keeping began more than 40 years ago, according to market researcher Global Insight.

Black & Decker booked first-quarter net income of $4.9 million, or 8 cents a share, down from $67.4 million, or $1.08 a share a year earlier. Excluding restructuring charges, earnings fell to 22 cents a share from $1.28.

Sales skidded 28% to $1.07 billion, with the weak dollar hurting revenue by five percentage points.

The company in January projected earnings of 5 cents to 15 cents a share on a 20% revenue drop, guidance which was notably short of analysts' expectations.

Gross margin fell to 31.7% from 34.6% on the sales woes.

Sales in the U.S. industrial-products group dropped 30% amid the construction slowdown and retailers paring back inventory as the recession grinds on. Sales in the power tools and accessories group fell 23%.

Shares were down 0.4% to $32.89 in premarket trading Thursday. The stock has been halved since September.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com