GLENVIEW, IL — Illinois Tool Works Inc. (ITW) has reported 9 percent growth in diluted net income per share in the 2007 first quarter. Diluted net income per share was 71 cents versus 65 cents in the 2006 first quarter. In addition, the company’s first quarter revenues increased 14 percent while net income rose 10 percent.

The company said the increase in first quarter earnings resulted from strong contributions from international end markets tempered by slowing growth or declining activity in a number of North American end markets. As a result, total company base revenues grew 1 percent in the quarter, with international base revenues increasing 8.9 percent and North American base revenues declining 3.5 percent. In addition, acquisitions added 10.7 percent to first quarter revenues. Other income increased $16.5 million in the quarter versus the prior year period largely due to the gain on a sale of a consumer packaging business unit.

For the first quarter of 2007, revenues were $3.759 billion versus $3.297 billion for the year ago period. First quarter operating income improved to $568.6 million from $540 million a year ago. Net income was $402.4 million compared to $366.5 million in the prior year period. The company’s operating margin of 15.1 percent was 130 basis points lower than the year earlier period due to significantly higher acquisition activity for both full-year 2006 and during the first quarter of 2007 as well as volume declines in some North American businesses.

The company’s free operating cash flow was $337.5 million in the first quarter. This cash was utilized to acquire nine companies in the first quarter representing $399 million of annualized revenues. In the first quarter, the company also repurchased $180 million of shares as part of its ongoing, open-ended buyback program.

"While a number of North American end markets continued to be challenging, our strong acquisition activity and expanding international presence were important contributors to our revenue and net income growth in the first quarter," said David Speer, chairman and chief executive officer. "We also continued to put our strong free cash flow to good use in the first quarter in what continues to be a solid acquisition environment."

Looking ahead, the company is forecasting a 2007 second quarter diluted earnings per share range of 86 cents to 90 cents and a full-year range of $3.27 to $3.39. Total company base revenues are expected to grow in a range of 0.4 percent to 2.4 percent in the second quarter and 1.8 percent to 3.8 percent for the full year. If the company achieves the midpoints of these forecasted ranges, the diluted earnings per share growth would be 9 percent in the second quarter and 11 percent for the full year.

For more information about ITW, go to: http://www.itw.com.