GLENVIEW, IL -- Illinois Tool Works (ITW) has reported record earnings for the fourth quarter of 2004, with diluted income per share from continuing operations increasing 30 percent. Income from continuing operations in the fourth quarter was $359.2 million, or $1.21 per diluted share, versus $286.9 million, or 93 cents per diluted share, in the fourth quarter of 2003.

For the fourth consecutive quarter, the company posted double digit gains in operating performance and produced improved total company operating margins. For the quarter, revenues grew 16 percent, operating income increased 24 percent and operating margins of 17.5 percent were 110 basis points higher than in 2003.

Total base revenues for ITW grew 8.2 percent in the 2004 fourth quarter and increased 8.1 percent for the full year. Revenues were $3.052 billion compared with $2.626 billion the year prior. Fourth quarter operating income improved to $535.2 million from $431.7 million in the prior year period.

The company's overall operating margin improved to 17.5 percent, largely due to fourth quarter inventory revaluations related to higher raw material costs in previous quarters. ITW stated inventory revaluations positively impacted its North America Engineered Products and Specialty Systems segments.

On a full-year 2004 basis, diluted income per share from continuing operations of $4.39 was 30 percent higher than the $3.37 per diluted share for 2003. Revenues grew 17 percent to $11.731 billion from $10.036 billion, operating income increased 26 percent to $2.057 billion from $1.633 billion, and income from continuing operations of $1.340 billion was 29 percent higher than the $1.040 billion for the 2003 full year.

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