GLENVIEW, Ill. — As previously announced, Illinois Tool Works Inc. (ITW) has approved a plan to divest its Decorative Surfaces segment and Click Commerce business. Accordingly, the company has reclassified the results of these businesses to discontinued operations. The effect of the reclassification is as follows:
Diluted Income Per Share from Continuing Operations
| First Half 2008 | First Half 2007 | % Change | |
| As Previously Reported | $1.57 | $1.54 |
2% |
| Reclassification of Discontinues Operations | 0.07 | (0.11) | |
| As Adjusted (Reclassified) | $1.64 | $1.43 | 15% |
The Decorative Surfaces segment consists of the Wilsonart and related high-pressure laminate businesses around the world. In 2007, the Decorative Surfaces segment had revenues of $1.2 billion and operating margins of 13 percent. ITW has retained Goldman Sachs to advise on the divestiture process for these businesses. Click Commerce, a supplier of software solutions and consulting services to a number of large, international companies, offers advanced software solutions in key categories such as supply chain and parts optimization, clinical research, contingent labor management and commerce.
Looking forward, the company experienced a slowdown in North America in September as industrial production and end market fundamentals weakened in the month. Margins also compressed, in part, due to the more difficult environment to recover raw material price increases. As a result of slowing end markets and the discontinued operations reclassification, the company has lowered its third quarter and full-year forecasts.
The company is now forecasting the third quarter 2008 income per share from continuing operations to be in a range of 82 cents to 86 cents. This forecast assumes a total company revenue growth range of 9 percent to 11 percent. The new forecasted range compares to a third quarter 2007 adjusted income per share from continuing operations of 84 cents. Excluding the accounting for discontinued operations, the third quarter would be in a range of 86 cents to 90 cents.
For the full-year, the company is now forecasting income per share from continuing operations to be in a range of $3.22 to $3.34. This forecast assumes a total company revenue growth range of 9 percent to 11 percent. The new forecasted range compares to a full-year 2007 adjusted income per share for continuing operations of $3.08.
