Illinois Tool Works Inc.
) in its recently held annual investors' meeting announced a
revision in its guidance (issued in October 2012) for the fourth
quarter and the full year 2012.
Though revenue growth outlook was kept unchanged at (1%)-(4%)
for the fourth quarter and 0%-1.0% for 2012, the company
increased its guidance for earnings per share from continuing
operations from a range of 86-94 cents to $1.99-$2.09. For 2012,
earnings per share are now projected to be within $5.19-$5.29
range as compared with $4.06-$4.14 expected earlier.
The revised earnings guidance includes net gains from the
divestiture of Decorative Surfaces as well as equity interest on
it. Excluding these, the company also takes into account some
discrete corporate and tax items, taking its earnings guidance to
the 86-94 cents range for the fourth quarter and $4.06-$4.14 for
Revisions were also seen in tax rate that went up from the
28.5%-29.5% range to the 33.5%-34.5% range for the fourth quarter
and from the range of 28.5%-29.5% to 30.5%-31.5% range for 2012.
Restructuring expenses for the year was reiterated at the
$100-$110 million range.
For 2013, the company came up with its organic revenue growth
forecast in the range of 1% to 3%. Sales in North America is
expected to grow 2% to 4% while Asia Pacific & Other in the
range of 2% to 4%. European business is predicted to remain
Illinois Tool's goals for a five year period from 2012 to 2017
were also declared at the meeting. The company targets the
following: organic growth to be 200 basis points above industrial
production by 2017; operating margins and return on invested
capital to be above 20% by 2017; 100% free cash flow conversion
and 12% earnings per share CAGR beyond 2017.
Illinois Tool Works is one of the leading manufacturers of
industrial products and equipment operating through 800 business
units in 57 countries. We currently maintain a Neutral
recommendation on the company. The stock also bears a Zacks #3
Rank, implying a short-term Hold rating. Its prime competitor
General Electric Co.
) has a Zacks #4 Rank (Sell) while
Manitowoc Co. Inc.
) has a Zacks #3 (Hold) Rank.
GENL ELECTRIC (GE): Free Stock Analysis
ILL TOOL WORKS (ITW): Free Stock Analysis
MANITOWOC INC (MTW): Free Stock Analysis
To read this article on Zacks.com click here.