By Dow Jones Business News, October 21, 2013, 08:20:00 PM EDT
By Ben Fox Rubin and John Kell
Illinois Tool Works Inc.'s ( ITW ) third-quarter earnings slid 14% as the manufacturing conglomerate reported a decline
in revenue, hurt by weakness in the North America market.
Adjusted profit for the period came in line with the company's expectations, though revenue fell more than analysts
Looking ahead, the company now sees full-year earnings of $3.56 to $3.64 a share on revenue growth of 1% to 2%,
compared to the prior view of $3.50 to $3.66 in per-share earnings on 0.5% to 2.5% revenue growth.
For the current quarter, Illinois Tool Works sees a per-share profit of 85 cents to 93 cents on 2% to 5% revenue
growth, figures that represent continuing operations. Analysts surveyed by Thomson Reuters had projected a profit of 91
Illinois Tool Works operates several hundred businesses in industrial sectors that include automotive components,
welding equipment, testing and measurement devices, industrial packaging and commercial kitchen appliances.
The company has said it plans to shrink the size of its business portfolio by about 25% in the coming years as it
abandons slow-growing markets and sheds businesses with commodity-type product lines. To that end, last month it said it
was putting its industrial packaging segment on the block, following its recent sale of other businesses.
The realignment is expected to eliminate hundreds of managers and reduce expenses for materials and services.
Overall, Illinois Tool Works reported a third-quarter profit of $452 million, or $1.01 a share, down from $524
million, or $1.12 a share, a year earlier. Earnings from continuing operations fell to 90 cents from 95 cents a share,
as revenue dropped 4.4% to $3.57 billion.
The company had projected per-share earnings of 84 cents to 92 cents, while analysts expected revenue of $3.59
On an organic basis, revenue slid 1.4% in North America but grew 2.9% internationally. In markets abroad, organic
revenue climbed 6.9% in Asia Pacific, bolstered by double-digit growth in China. European organic revenue inched up 1%.
Shares were down 1.4% to $76.48 after hours.
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