Illinois Tool Works 3Q profit rises, revenue falls
GLENVIEW, Ill. (AP) — Illinois Tool Works said Tuesday that its net income rose 3 percent in the third quarter, helped by some lower costs and expenses. But revenue dipped and the industrial equipment maker lowered its full-year earnings and revenue outlook because of weakness in some of its international end markets and the stronger dollar.
For the three months ended Sept. 30, Illinois Tool Works Inc. earned $524 million, or $1.12 per share. A year ago it earned $507 million, or $1 per share.
Earnings were $1.09 per share when stripping out gains from asset sales.
A 4 percent reduction in the number of outstanding shares boosted per-share earnings by about 5 cents.
Analysts, on average, were expecting earnings of $1.06 per share, according to FactSet.
Selling, administrative and research and development expenses declined 3 percent to $811 million from $836 million.
Revenue slipped 2 percent to $4.5 billion from $4.58 billion, pulled down by the stronger dollar and weakening demand in various international end markets.
Wall Street estimated $4.57 billion in revenue.
Cost of revenues fell almost 4 percent to $2.86 billion.
In the power systems and electronics division, revenue increased nearly 5 percent.
The Glenview, Ill. company now expects full-year earnings of $4.06 to $4.14 per share. That's below the range it offered in July of $4.03 to $4.19 per share and reflects the second time it has cut its forecast.
Revenue for the year is now anticipated to be flat to up 1 percent. This implies revenue of $17.79 billion to $17.96 billion. That's below the July forecast for revenue growth of 1 to 3 percent, and is also the second cut this year.
Analysts expect earnings of $4.12 per share on revenue of $18.16 billion.
For the fourth quarter, the company foresees earnings of 86 cents to 94 cents per share, with revenue down 1 percent to 4 percent. Based on the prior-year period's revenue of $4.32 billion, this implies revenue of $4.15 billion to $4.28 billion.
Wall Street predicts earnings of 98 cents per share on revenue of $4.38 billion.
Last week, Illinois Tool Works announced that CEO David Speer was taking a leave of absence because of health concerns. It named Vice Chairman E. Scott Santi as acting CEO.
In morning trading, Illinois Tool Works shares slipped 54 cents to $60.02 as the broader markets declined. The stock has traded between $42.41 and $62.09 in the past 52 weeks, and is up about 28 percent since the start of the year.