Illinois Tool Works Inc. Earnings: Streak of Four Straight Profit Increases Snapped

S&P 500 (NYSE:SPY) component Illinois Tool Works Inc. (NYSE:ITW) reported its results for the first 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 Earnings Cheat Sheet for the First Quarter

Results: Net income for the machine industrial fell to $486 million ($1 per share) vs. $623.1 million ($1.24 per share) a year earlier. This is a decline of 22% from the year-earlier quarter.

Revenue: Rose 6.4% to $4.55 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Illinois Tool Works Inc. reported adjusted net income of 97 per share. By that measure, the company beat the mean estimate Analysts were expecting revenue of $4.6 billion.

Quoting Management: “Our strong first quarter operating performance reflects a number of ITW attributes: balanced geographic footprint, our established 80/20 operating discipline and our return-based approach to allocating cash to both our businesses and our shareholders,” said David B. Speer, chairman and chief executive officer. “Both our first quarter earnings and operating margins exceeded our expectations and our return on invested capital was within our target range. Despite uneven end market demand in Europe, we remain optimistic about our full-year prospects.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the fourth quarter of the last fiscal year, net income rose 12.6% from the year earlier, while the figure increased 21.1% in the third quarter of the last fiscal year, 18.5% in the second quarter of the last fiscal year and more than twofold in the first quarter of the last fiscal year.

The company has now beaten analyst estimates for three quarters in a row. It beat the mark by 2 cents in the fourth quarter of the last fiscal year and by 2 cents in the third quarter of the last fiscal year.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is $1.08 per share, up from $1.06 ninety days ago. Over the past three months, the average estimate for the fiscal year has climbed from $4.12 per to share to $4.15.

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

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