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Stanley Black & Decker Cuts FY18 Outlook, Announces New Cost Reduction Program

Stanley Black & Decker (SWK) on Thursday slashed its earnings outlook for fiscal 2018 to a range of $5.90 to $6.00 per share from the prior guidance range of $7.00 to $7.20 per share. It also cut adjusted earnings guidance to a range of $8.10 to $8.20 per share from the previous forecast range of $8.30 to $8.50 per share.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $8.35 per share for the year. Analysts' estimates typically exclude special items.

Additionally, the company announced a new cost reduction program which is expected to deliver $250 million in annual cost savings for 2019. It is also taking additional pricing actions to preserve the company's ability to produce 2019 earnings growth. The cost actions will be substantially complete by year-end 2018 and the majority of the pricing actions will be implemented in early first quarter 2019.

The pre-tax restructuring charge is expected to be about $125 million and is anticipated to be booked during the fourth quarter of 2018.

Separately, STANLEY announces that The Home Depot (HD) will now be the exclusive home improvement retailer for its STANLEY hand tools and storage product portfolio, both in store and online, beginning in 2019. In addition, The Home Depot will also garner exclusivity across the STANLEY FATMAX product line.

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