Black & Decker, the Towson, Maryland-based Corporation known as the biggest power-tool manufacturer in the United States, announced their quarterly and annual profit forecast. The forecast was lowered due to the costs linked to a recall and a slowdown in country’s consumer spending.

The Dewalt XRP cordless drills were recalled and the unexpected bad business conditions determined the company best known for its power tools and home appliances to cut its forecast by approximately 38 percent for the fourth quarter.

The expected profit announced today was $1.03 a share, down from $1.65 at most. The statement added that the full-year project was lowered to $6 per share without taking in consideration the gain from a tax settlement with the government.

Among the main factors causing Black & Decker to lower its forecast were: the increase of fuel and food prices corroborated by the worst housing recession in America since 1991. All these caused the trimming of consumer’s purchases.

"The change in the operating environment is expected to have a significant negative impact on operating income, compared to previous guidance," the company statement said.

The corporation dropped $7.29, or 9.1 percent, to $72.84 at 9:41 a.m. in New York Stock Exchange composite trading.

The previous forecast made in late October indicted a quarterly profit of at least $1.55 a share and above $6.50 for the year. Adding the tax settlement with the U.S. government, the tool producer anticipates quarterly profit of $3.39 a share and annual earnings of $8.27.