GLENVIEW, Ill. – Illinois Tool Works Inc. (ITW) has reported third quarter 2012 diluted income per share from continuing operations of $1.12, a 12 percent increase versus the 2011 third quarter. Excluding the impact of divestiture gains in the third quarter, diluted income per share from continuing operations totaled $1.09.
Total revenues of $4.5 billion decreased 1.7 percent; and operating income of $763 million increased 6.8 percent.
The company reported that while third quarter total revenues and organic revenues were lower than anticipated due to the negative impact of currency translation and slowing demand in a variety of international end-markets, operating margins of 16.9 percent outperformed expectations and reflected improvement across all segments.
ITW also announced that it returned nearly $600 million to shareholders via share repurchases of $416 million and dividends paid of $169 million.
"Even with end-markets slowing in a number of international geographies, we were pleased by the consistent level of end-market demand in North America," said E. Scott Santi, president and acting CEO. "From a profitability standpoint, we continued to focus on our differentiated 80/20 business process and, as a result, we produced very strong operating margin gains in the quarter. We also continued to return significant levels of cash to our shareholders through our share repurchase and dividend programs."
Looking ahead, the company says it believes international end-markets will continue to be sluggish and the impact of currency translation will be modestly negative in the 2012 fourth quarter. As a result, the company now expects full-year total revenue growth to be in a range of 0 percent to 1 percent. Full-year diluted income per share from continuing operations is forecasted to be in a range of $4.06 to $4.14. For the 2012 fourth quarter, the company is forecasting diluted income per share from continuing operations to be in a range of 86 cents to 94 cents and total revenues to decline in a range of 1 percent to 4 percent.
The company expects the previously announced Decorative Surfaces divestiture transaction to close in the fourth quarter. Both the full year and fourth quarter forecasts exclude two months of operating contributions from the Decorative Surfaces segment, gains and expenses related to the transaction, as well as the impact from the 49 percent ongoing equity interest in the new Decorative Surfaces entity.
