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ITW Reports 2012 First Quarter Results

Organic revenues increase 3.2 percent.

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GLENVIEW, Ill. – Illinois Tool Works Inc. (ITW) today reported first quarter 2012 diluted income per share from continuing operations of 97 cents.
 
The company reported total revenues of $4.55 billion, an increase of 6.4 percent. Organic or base revenues grew 3.2 percent, with North American organic revenues increasing 6.6 percent and international organic revenues were essentially flat. European organic revenues decreased 1.2 percent while Asia Pacific organic revenues grew 3.1 percent.
 
ITW said acquisitions net of divestitures added 4.4 percent to revenues while currency translation negatively impacted revenues by 1.3 percent. The company reported operating income of $705 million, up 7 percent.
 
The company said it returned more than $600 million to shareholders through share repurchase of $474 million and dividends paid of $174 million. At the end of the first quarter, the company had $3.4 billion remaining in its share repurchase authorization.
 
ITW also continued to divest non-core assets as part of its longer-term portfolio strategy. The company concluded the sale of its $375 million finishing business to Graco Inc. on April 2 in a $650 million cash transaction. The estimated pre-tax gain of $450 million will be recorded in the second quarter as part of discontinued operations.
 
"Our strong first quarter operating performance reflects a number of ITW attributes: balanced geographic footprint, our established 80/20 operating discipline and our return-based approach to allocating cash to both our businesses and our shareholders," said David Speer, chairman and CEO. "Both our first quarter earnings and operating margins exceeded our expectations and our return on invested capital was within our target range. Despite uneven end market demand in Europe, we remain optimistic about our full-year prospects."
 
Largely due to better-than-expected first quarter results and share repurchase activity, the company is raising its forecast for 2012 full-year diluted income per share from continuing operations. The company said it expects full-year guidance to be in the range of $4.14 to $4.38 versus the prior forecasted range of $4.02 to $4.26.
 
Full year revenue growth is expected to be in a range of 5 percent to 7 percent. For the 2012 second quarter, the company is forecasting diluted income per share from continuing operations to be in the range of $1.08 to $1.16 and assumes a total revenue growth range of 3.5 percent to 6 percent.

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