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

Apr 24, 2012, 08:00 ET from Illinois Tool Works Inc.

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.



RELATED LINKS

http://www.itw.com