Earnings Preview: ITW - Analyst Blog

Illinois Tool Works Inc. ( ITW ) is slated to release its second quarter 2012 results on Tuesday, July 24. The current Zacks Consensus Estimate for earnings per share (EPS) is $1.09, representing an annualized growth of 14.02%.

With respect to earnings surprises, over the trailing four quarters, Illinois Tooloutperformedthe Zacks Consensus Estimate in three quarters, and underperformed in one quarter. The average earnings surprise was a positive 0.14%, implying that the company outperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.

Second Quarter Highlights

On April 24, Stanley Black & Decker reported its second quarter 2012 results. Earnings per share from continuing operations were 97 cents, representing a year-over-year increase of 10.2%. Earnings were 2 cents above the Zacks Consensus Estimate of 95 cents and at the top-end of management's guidance range of 89-97 cents.

Operating revenue increased 6.4% year over year to $4,547 million, but failed to surpass the Zacks Consensus Estimate of $4,598 million. The year-over-year increase in operating revenue symbolized continued improvement in end market demand. The year-over-year improvement was towards the lower-end of management's projected growth range of 6.0%-9.0%.

For further details follow the link: ITW Beats Est., Ups FY12 Outlook

Agreement/Magnitude of Estimate Revisions

In the last 30 days, of the 16 analysts providing earnings per share estimates, 9 revised down their estimates for the year 2012 and 7 for 2013. Also, there was a positive revision for 2013.

Second quarter 2012 earnings per share estimate was increased by one analyst and lowered by 7 out of the 13 analysts in the last 30 days.

Estimate for the second quarter 2012 decreased 2 cents to $1.09 while for 2012 it went down by 7 cents to $4.18 and by 9 cents to $4.63 for 2013. These represent a year-over-year growth of 14.02% for the second quarter, 2.57% for 2012 and 10.68% for 2013.

Our Take

Results in the second quarter 2012 are expected to be higher on a year-over-year as well as sequential basis. However, as compared with the Zacks Consensus Estimate, it is expected to fall behind by 0.92%.

Most of the negative revisions in estimates take into account the company's significant exposure to markets, which are still in doldrums. Moreover, downward revisions account for expectations of depressed margins due to the headwinds emanating from higher input costs. To add to the peril, rising competitive threats are augmenting problems for the Company.

Illinois Tool Works is one of the leading manufacturers of industrial products and equipment. The company faces stiff competitions from its peers including Cooper Industries plc ( CBE ), General Electric Co. ( GE ), and Manitowoc Co. Inc. ( MTW ).

COOPER INDS PLC (CBE): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

ILL TOOL WORKS (ITW): Free Stock Analysis Report

MANITOWOC INC (MTW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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