GLENVIEW, Ill. — Illinois Tool Works (ITW) has reported 17 percent growth in 2008 second quarter diluted income per share from continuing operations. In addition, the company’s revenues grew 10.5 percent, operating income increased 8.8 percent and income from continuing operations rose 10 percent in the most recent quarter.
The double-digit operating revenue increase in the quarter consisted of a 4.3 percent contribution from acquisitions and a 6.4 percent contribution from currency translation. Base revenues were flat in the quarter, with international base revenues growing 3 percent and North American base revenues declining 2 percent. For the 2008 second quarter, revenues were $4.570 billion versus $4.137 billion for the prior year period. Second quarter operating income was $756.7 million compared to $695.6 million. Income from continuing operations was $528.5 million versus $480.4 million.
In the 2008 second quarter, total company operating margins of 16.6 percent were 20 basis points lower than the prior year period due to the dilutive impact of acquisitions and higher restructuring costs. Acquisitions lowered margins 30 basis points while restructuring reduced margins 20 basis points versus the year ago period. Notably, base margins were 30 basis points higher than a year ago.
"We believe our operating performance in the second quarter exemplifies the company’s ability to outperform across slowing end markets thanks to our decentralized operating structure and our aggressive efforts to manage operating costs," said David Speer, chairman and chief executive officer. "In addition, we remain focused on value-adding acquisitions as evidenced by the more than $500 million of acquired revenues we purchased through the end of the second quarter."
Looking ahead, the company is forecasting diluted income per share from continuing operations of 93 to 99 cents for the 2008 third quarter. The 2008 third quarter forecast assumes a total company growth range of 10 percent to 14 percent. The company is increasing its full-year diluted income per share from continuing operations to a range of $3.40 to $3.52. The full-year forecast assumes a total company revenue growth range of 9 percent to 12 percent. The full-year forecast also reflects a 22 cent after-tax charge to earnings taken in the first quarter due to impairment and European tax charges.
