Black & Decker profit falls 18 percent

BOSTON (Reuters) - Black & Decker Corp (BDK.N) reported on Friday that quarterly profit fell less than expected as a favorable tax rate helped offset effects of the severe U.S. housing slump, which has sliced demand for its power tools, locks and plumbing products.

The U.S. manufacturer cut its full-year profit forecast, warning it is starting to see a slowdown in demand from Western Europe and noting that materials costs are rising faster than expected.

Net income in the second quarter fell 18.1 percent to $96.7 million, or $1.58 a diluted share, from $118 million, or $1.75 per share, a year earlier. The Towson, Maryland-based company noted the latest profit included 12 cents a share resulted from a lower tax rate.

Analysts, on average, expected profit of $1.41 per share, according to Reuters Estimates.

Sales were down 3.4 percent to $1.64 billion.

"Weak demand in the U.S. and slowing conditions in parts of Western Europe ... resulted in lower sales and earnings," said Nolan Archibald, chairman and chief executive, in a statement.

It now looks for full-year profit of $5.25 to $5.45 per share versus its April forecast of $5.25 to $5.65. Analysts, on average, expect $5.34 per share, according to Reuters Estimates.

Black & Decker shares are down about 14 percent so far this year, in line with the slide in the Dow Jones U.S. durable household products index .DJUSHD.

(Reporting by Scott Malone in Boston; additional reporting by Euan Rocha in New York; editing by Jeffrey Benkoe)