Stanley Black's Q4 Earnings Beat Estimates, Revenues Miss

Stanley Black & Decker, Inc. SWK reported fourth-quarter 2025 adjusted earnings of $1.41 per share, which beat the Zacks Consensus Estimate of $1.27. However, the bottom line decreased 5.4% year over year.

Stanley Black’s net sales of $3.68 billion missed the consensus estimate of $3.76 billion. The top line declined 1% from the year-ago quarter.

In 2025, SWK reported net revenues of $15.1 billion, which decreased 2% year over year. However, the company’s adjusted earnings were $4.67 per share, down 7.1% year over year.

Stanley Black’s Segmental Discussion

Effective from the first quarter of 2025, SWK has renamed the Industrial segment as the Engineered Fastening segment. It had no impact on the company's consolidated financial statements or segment results.

Revenues from the company’s primary segment, Tools & Outdoor, totaled $3.16 billion, which decreased 2.1% from the year-ago quarter. Our estimate was $3.26 billion.

Revenues from the Engineered Fastening segment grossed $524.2 million, up 6.4% year over year. Our estimate was $502.0 million.

SWK’s Margin Profile

Stanley Black’s cost of sales was down 4.4% year over year to $2.46 billion. The gross profit increased 6.8% year over year to $1.22 billion. The gross margin increased 240 basis points (bps) year over year to 33.2%.

Selling, general and administrative expenses decreased 6.2% year over year to $801.8 million. Adjusted EBITDA was $497.3 million, indicating a year-over-year increase of 31.5%. The margin increased 330 bps to 13.5%.

SWK’s Balance Sheet and Cash Flow

While exiting the fourth quarter, Stanley Black had cash and cash equivalents of $280.1 million compared with $290.5 million at the end of fourth-quarter 2024. The long-term debt balance was $4.70 billion, lower than $5.6 billion reported at the end of fourth-quarter 2024.

In 2025, net cash generated by operating activities was $971.2 million compared with $1.11 billion generated in the year-ago period. Capital and software expenditures totaled $283.3 million, down from $353.9 million reported in the year-ago period. Free cash flow (before dividends) was $687.9 million compared with $753.0 million a year ago.

In 2025, SWK paid out dividends worth $500.6 million to its shareholders, up 1.9% from the year-ago period.

Divestiture of CAM

In December 2025, Stanley Black inked a deal to divest its business unit, Consolidated Aerospace Manufacturing LLC (“CAM”), to Howmet Aerospace. The deal carries a cash value of about $1.8 billion. The divestment is expected to help SWK focus on its core businesses, reduce its debt and support its capital-allocation priorities. Subject to customary closing conditions, the divestiture is expected to close in the first half of 2026.

SWK’s 2026 Guidance

In 2026, Stanley Black anticipates earnings to be $3.15-$4.35 per share. Adjusted earnings are projected to be $4.90-$5.70 per share. The company targets to generate annual free cash flow (non-GAAP) of $700-$900 million, increasing 16% at the midpoint.

SWK’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Graco Inc. GGG posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.

Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.

Baker Hughes Company BKR reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.

Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.

3M Company MMM delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.

MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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