Illinois Tool Works Earnings: Second Straight Quarter of Increasing Profit

Falling revenue did not prevent S&P 500 (NYSE:SPY) component Illinois Tool Works Inc. (NYSE:ITW) from reporting a profit boost in the third quarter. Illinois Tool Works manufactures a range of industrial products and equipment for the automotive, construction, electronics, food/beverage, packaging, power system, decorative surfaces, and medical industries.

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Illinois Tool Works Inc. Earnings Cheat Sheet

Results: Net income for Illinois Tool Works Inc. rose to $524 million ($1.12 per share) vs. $507.6 million ($1.04 per share) in the same quarter a year earlier. This marks a rise of 3.2% from the year-earlier quarter.

Revenue: Fell 1.8% to $4.5 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Illinois Tool Works Inc. reported adjusted net income of $1.09 per share. By that measure, the company fell in line with the mean estimate of $1.09 per share. It fell short of the average revenue estimate of $4.86 billion.

Quoting Management: “Even with end markets slowing in a number of international geographies, we were pleased by the consistent level of end market demand in North America,” said E. Scott Santi, president and acting chief executive officer.

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 14%.

The company fell in line with estimates last quarter after beating expectations in the previous two quarters. In the second quarter, it topped the mark by 2 cents, and in the first quarter, it was ahead by 2 cents.

Net income has increased 18.3% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed 76.8% from the year-earlier quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from $1.12 per share to $1.10. For the fiscal year, the average estimate has moved down from $4.25 a share to $4.18 over the last thirty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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