GLENVIEW, IL — Illinois Tool Works (ITW) has reported an operating revenue increase of 13.8 percent for the three months ended Feb. 29. The company said growth in revenues was primarily due to contributions from acquisitions and translation. Base revenues also contributed to growth in the period. For the first two months of the quarter, total revenues exceeded company expectations.
The company has lowered its 2008 first quarter and full-year earnings estimates due to two special charges with an estimated pretax effect totaling $127 million or 22 cents per share after-tax. As part of the company’s annual testing of goodwill in the first quarter of each year, an impairment charge in a range of $90 to $100 million will be recorded related to the company’s industrial software businesses. Separately, an estimated pretax charge of $32 million will be recorded in the first quarter for European taxes on investment transfers related to legal entity structuring transactions.
Absent these two special charges, the company’s operating results for the first quarter are expected to be at the high end of the previous forecast of 72 cents to 78 cents. For the 2008 first quarter, the company is now forecasting diluted income per share from continuing operations of 50 cents to 56 cents.
The 2008 first quarter forecast continues to assume a total company revenue growth range of 8 percent to 11 percent.
The company is now forecasting a full-year 2008 diluted income per share from continuing operations range of $3.25 to $3.39. The full-year forecast continues to assume a total company revenue growth range of 6 percent to 10 percent.
