UPDATE 1-Europe weakness, US shutdown hurt Stanley B&D outlook
* Cuts FY adj earnings/shr forecast to $4.90-$5.00 from $5.40-$5.65
* Security business margin falls to 12.2 pct from 16 pct
* Shares fall as much as 15 pct
(Adds CFO comments from conference call, details on security business, updates share price)
Oct 16 (Reuters) - Power tool maker Stanley Black & Decker Inc cut its 2013 profit forecast, blaming weakness in its European security business and the U.S. government shutdown and spending cuts, sending its shares down as much as 15 percent.
The company reported a better-than-expected quarterly profit but investors were spooked by the surprise cut in forecast, as the European weakness squeezes margins.
Stanley Black & Decker reported a 4 percent drop in organic sales in its European security business, which sells automatic doors and commercial locks, and warned of more weakness in its U.S. businesses.
"We really believe the U.S. government sequestration and shutdown have had a modest impact in third quarter on us and will have a slightly more significant impact on us in the fourth quarter," Chief Financial Officer Donald Allan said on a conference call with analysts on Wednesday.
The company reduced its full-year adjusted earnings forecast to $4.90-$5.00 per share from $5.40-$5.65.
Analysts on average were expecting $5.44 per share, according to Thomson Reuters I/B/E/S.
The European weakness cut into the security business's operating margin, which fell to 12.2 percent from 16 percent a year earlier.
"In Europe, we see a situation where organic growth is still elusive and negative ...," Allan said.
The business, which contributed 21 percent to third-quarter sales, grew 4 percent organically in North America and emerging markets, helped by improved volumes of automatic doors.
Net income rose 44 percent to $166 million, or $1.07 per share, from $115.2 million, or 54 cents per share, a year earlier.
On an adjusted basis, the company earned $1.39 per share, beating analysts' expectations by a cent.
Overall sales rose 10 percent to $2.76 billion, missing Wall Street's expectations of $2.82 billion.
Stanley Black & Decker shares were down 14 percent at $76.91 on the New York Stock Exchange. They have risen 24 percent in the last one year.
(Reporting by Siddharth Cavale and Sagarika Jaisinghani and Siddharth Cavale in Bangalore; Editing by Sriraj Kalluvila)