By Tess Stynes
Illinois Tool Works Inc. (ITW) raised its 2014 profit outlook
Tuesday, and the diversified manufacturer reported third-quarter
earnings rose 17% as most of its business segments posted revenue
growth and margins strengthened.
For the year, ITW raised its per-share earnings estimate to
$4.57 to $4.65, from its previous estimate for per-share earnings
of $4.50 to $4.52 .
For the fourth quarter, the company expects per-share earnings
of $1.07 to $1.15 on flat revenue owing to currency impacts.
Analysts polled by Thomson Reuters expected per-share profit of
$1.13 and revenue growth of 2% to $3.64 billion.
The company--which operates an array of businesses across
several sectors--has been working to shrink its portfolio and exit
slower growing markets. ITW completed the $3.2 billion sale of its
industrial packaging business to Carlyle Group (CG) during the
second quarter.
ITW's automotive group has been the company's best performer
lately amid surging sales and production volumes of light vehicles
in the U.S. For the third quarter, the automotive segment reported
revenue increased 8% excluding impacts such as acquisitions,
divestitures and currency fluctuations.
ITW's welding business; testing and measurement equipment and
other business lines are closely tied to capital spending by
businesses and could face pressure from slowing economic
conditions, especially in Europe. The construction segment has
faced challenges from uneven demand in the U.S.
ITW reported a profit of $531 million, or $1.34 a share, up from
$452 million, or $1.01 a share, a year earlier. Earnings from
continuing operations rose to $1.28 from 90 cents.
Revenue increased 3.5% to $3.7 billion. Illinois Tool expected
per-share earnings of $1.19 to $1.27 and revenue growth of 3% to
4%.
And the company's operating margin rose 1.9 percentage points to
20.9%.
Write to Tess Stynes at tess.stynes@wsj.com
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