ITW Reports 2012 First Quarter Diluted Income Per Share from Continuing Operations of $0.97; Total Revenues Grow 6.4 Percent and Organic Revenues Increase 3.2 Percent; Company Repurchases $474 Million of Shares; Company Raises Full-Year Earnings Per Share Range to $4.14 to $4.38

GLENVIEW, Ill., April 24, 2012 /PRNewswire/ -- Illinois Tool Works Inc. (NYSE: ITW) today reported first quarter 2012 diluted income per share from continuing operations of $0.97. Excluding a one-time tax benefit of $0.33 associated with an Australian tax matter in the 2011 first quarter, diluted income per share from continuing operations in the 2012 first quarter increased 10.2 percent versus the year-ago period.

First quarter 2012 financial and operating highlights versus the 2011 first quarter included:

  • Total revenues of $4.55 billion increased 6.4 percent.
  • Organic or base revenues grew 3.2 percent, with North American organic revenues increasing 6.6 percent and international organic revenues were essentially flat. European organic revenues decreased 1.2 percent while Asia Pacific organic revenues grew 3.1 percent.
  • Acquisitions net of divestitures added 4.4 percent to revenues while currency translation negatively impacted revenues by 1.3 percent.
  • Operating income of $705.0 million grew 7 percent.
  • Operating margins of 15.5 percent improved 10 basis points.
  • Total revenues for the Power Systems and Electronics segment increased 11.1 percent. Segment organic revenues grew 6.9 percent due to the ongoing strength of the worldwide welding businesses. Due to strong demand from heavy equipment manufacturers and energy producers, organic revenues for worldwide welding grew 18.6 percent. The Company's electronics businesses were hampered by weak worldwide consumer demand and related inventory destocking. Total electronics organic revenues declined 10.5 percent. Segment operating margins totaled 21.4 percent.
  • The Company returned more than $600 million to shareholders through share repurchase of $474 million and dividends paid of $174 million.  At the end of the first quarter, the Company had $3.4 billion remaining in its share repurchase authorization.
  • The Company continued to divest non-core assets as part of its longer-term portfolio strategy.  ITW concluded the sale of its $375 million finishing business to Graco Inc. on April 2, 2012, in a $650 million cash transaction.  The estimated pre-tax gain of $450 million will be recorded  in the second quarter as part of discontinued operations.

"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."

Largely due to better-than-expected first quarter results and share repurchase activity, the Company is raising its forecast for 2012 full-year diluted income per share from continuing operations. The Company expects full-year guidance to be in the range of $4.14 to $4.38 versus the prior forecasted range of $4.02 to $4.26. Full-year revenue growth is expected to be in a range of 5.0 percent to 7.0 percent. For the 2012 second quarter, the Company is forecasting diluted income per share from continuing operations to be in the range of $1.08 to $1.16 and assumes a total revenue growth range of 3.5 percent to 6.0 percent.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding diluted income per share from continuing operations and total revenue growth. These statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those anticipated. Such factors include those contained in ITW's 2011 Form 10-K.

Celebrating its 100-year anniversary in 2012, ITW is a Fortune 200 global diversified industrial manufacturer of value-added consumables and specialty equipment with related service businesses. The Company focuses on profitable growth and strong returns across worldwide platforms and businesses. These businesses serve local customers and markets around the globe, with a significant presence in developed as well as emerging markets. ITW's revenues totaled $17.8 billion in 2011, with more than half of these revenues generated outside of the United States.

 

ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES

STATEMENT OF INCOME (UNAUDITED)

(In millions except per share amounts)

 






THREE MONTHS ENDED



MARCH 31,



2012


2011

Operating Revenues

$

4,547

$

4,272

Cost of revenues


2,911


2,762

Selling, administrative, and research and development expenses


859


796

Amortization of intangible assets


72


55

Operating Income


705


659

Interest expense


(50)


(44)

Other income (expense)


8


6

Income from Continuing Operations Before Income Taxes


663


621

Income Taxes


192


15

Income from Continuing Operations


471


606

Income from Discontinued Operations


15


17

Net Income

$

486

$

623






Income Per Share from Continuing





 Operations:





Basic


$0.98


$1.22

Diluted


$0.97


$1.21

Income Per Share from Discontinued





 Operations:





Basic


$0.03


$0.03

Diluted


$0.03


$0.03

Net Income Per Share:





Basic


$1.01


$1.25

Diluted


$1.00


$1.24

Shares outstanding during the period:





Average


482.0


498.6

Average assuming dilution


485.6


502.7











ESTIMATED FREE OPERATING CASH FLOW





THREE MONTHS ENDED



MARCH 31,



2011


2010

Net cash provided by operating activities

$

323

$

145

Less: Additions to plant and equipment


(84)


(89)

Free operating cash flow

$

239

$

56

 

 

ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION (UNAUDITED)

(In millions)

 



MARCH 31,


DECEMBER 31,


ASSETS


2012


2011


Current Assets:






Cash and equivalents

$

1,304

$

1,178


Trade receivables


3,134


2,819


Inventories


1,824


1,716


Deferred income taxes


370


366


Prepaid expenses and other current assets


360


384


Assets held for sale


397


386


Total current assets


7,389


6,849














Net plant and equipment


2,100


2,025


Investments


287


409


Goodwill


5,489


5,198


Intangible assets


2,400


2,233


Deferred income taxes


593


634


Other assets


686


636



$

18,944

$

17,984








LIABILITIES and STOCKHOLDERS' EQUITY






Current Liabilities:






Short-term debt

$

1,244

$

502


Accounts payable


831


697


Accrued expenses


1,388


1,435


Cash dividends payable


172


174


Income taxes payable


39


57


Deferred income taxes


5


5


Liabilities held for sale


98


107


Total current liabilities


3,777


2,977








Noncurrent Liabilities:






Long-term debt


3,521


3,488


Deferred income taxes


120


117


Other liabilities


1,391


1,368


Total noncurrent liabilities


5,032


4,973








Stockholders' Equity:






Common stock


5


5


Additional paid-in-capital


770


686


Income reinvested in the business


12,108


11,794


Common stock held in treasury


(3,175)


(2,692)


Accumulated other comprehensive income


410


224


Noncontrolling interest


17


17


Total stockholders' equity


10,135


10,034



$

18,944

$

17,984


 

SOURCE Illinois Tool Works Inc.



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