Illinois Tool Works Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Illinois Tool Works (NYSE:ITW) will unveil its latest earnings on Tuesday, October 23, 2012. 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.

Illinois Tool Works Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of $1.06 per share, a rise of 6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $1.10. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.06 during the last month. Analysts are projecting profit to rise by 0.7% compared to last year’s $4.11.

Past Earnings Performance: Last quarter, the company beat estimates by one cent, coming in at profit of $1.11 a share versus the estimate of net income of $1.10 a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit rose 76.8% to $881 million ($1.85 a share) from $498.4 million (99 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 0.9% to $4.66 billion from $4.61 billion.

Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $7.89 (15.1%), from $52.29 to $60.18. The stock price saw one of its best stretches over the last year between March 6, 2012 and March 19, 2012, when shares rose for 10 straight days, increasing 8.3% (+$4.46) over that span. It saw one of its worst periods between September 18, 2012 and September 26, 2012 when shares fell for seven straight days, dropping 4.4% (-$2.67) over that span.

Analyst Ratings: With nine analysts rating the stock a buy, one rating it a sell and seven rating the stock a hold, there are indications of a bullish stance by analysts.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 14% in the third quarter of the last fiscal year, 3.6% in the fourth quarter of the last fiscal year and 3.6% in the first quarter before increasing again in the second quarter.

The company enters this earnings announcement with steady profits recently. Net income has risen year-over-year average of 22.1% for the last four quarters.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.96 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 4.2% to $3.94 billion while assets rose 2.2% to $7.55 billion.

Wall St. Revenue Expectations: Analysts predict no change in revenue from the year-earlier quarter to $4.58 billion.

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

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