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Towson, Md.-based Black & Decker reported net earnings of $67.4 million for the first quarter, down 37.6 percent from $108.1 million in the same period last year. The company reported net sales of $1.49 billion for the quarter, down 5.7 percent from $1.57 billion as reported last year.
“Black & Decker's results reflect an increasingly difficult business environment. Demand for tools and home improvement products decreased sharply in North America, and commodity costs continued to rise,” said Nolan Archibald, company chairman and CEO. As a response, the company also said it plans to cut approximately 700 jobs – around 250 from management ranks and 450 from other areas of the company.
Archibald said that sales in the power tools and accessories segment decreased 10 percent for the quarter, which he attributed to the downturn in residential construction. Sales in the hardware and home improvement segment decreased 14 percent, he added.
“Today's business climate, including the housing downturn and related credit tightening, poses one of the toughest challenges Black & Decker has faced in many years,” he said.
He added that the company would be reducing expense levels, particularly in its power tool section.