GLENVIEW, Ill. – Illinois Tool Works Inc. (ITW) has reported fourth quarter 2014 earnings per share (EPS) from continuing operations of $1.18, 28 percent higher than the year-ago period. Operating margin increased 190 basis points to 19.6 percent and organic revenue grew 2.3 percent.
“We were pleased with ITW’s strong performance in the quarter and for the year,” said E. Scott Santi, president and CEO. “In the quarter, the company continued to deliver meaningful improvement in our earnings per share, operating margin and return on invested capital metrics.”
“For full-year 2014, ITW grew earnings per share 29 percent, expanded operating margin by 210 basis points to 19.9 percent, improved after-tax return on invested capital by 260 basis points to 18.9 percent, and returned $5 billion to shareholders in the form of dividends and share repurchases. As a result of the strength of the ITW business model and the continued execution of our enterprise strategy, the company is well positioned to deliver another year of solid progress in 2015,” Santi concluded.
For the fourth quarter, organic revenue was up 2.3 percent, with North American and international growth of 3 percent and 2 percent, respectively. In North America, organic revenue growth was driven by continued strength in welding, food equipment, and automotive OEM. Internationally, European organic revenues increased 1 percent and Asia Pacific grew 2 percent. As expected, ongoing product line simplification activities associated with the portfolio management component of ITW’s enterprise strategy reduced organic revenue growth by approximately 1 percentage point in the quarter. Total revenues of $3.5 billion were down 1.4 percent due to negative foreign currency translation impact.
Outlook
ITW is confirming its 2015 full-year EPS guidance range of $5.15 to $5.35, which is $5.25 at the midpoint, a 12 percent increase. Organic revenue growth for the year is expected to be 2.5 to 3.5 percent. Total revenue for the year is projected to decline 1 to 2 percent due to the impact of foreign currency translation. For the first quarter 2015, the company is forecasting EPS to be in a range of $1.13 to $1.21, which is $1.17 at the midpoint, a 16 percent increase. In the first quarter, the company expects 2 to 3 percent organic revenue growth and total revenue to decline 2 to 3 percent due to the impact of currency translation. The company’s outlook is based on current foreign exchange rates.
