ITW Reports Q4 And Full-Year Results

ITW Reports Q4 And Full-Year Results

The company initiated full-year EPS guidance in a range of $7.65 to $8.05 per share.

Illinois Tool Works has reported its fourth-quarter and full-year 2019 results.

Fourth-quarter revenue of $3.5 billion declined 3.1 percent with organic revenue down 1.6 percent.  Foreign currency translation and divestitures reduced revenues by 1 percent and 0.5 percent, respectively. Product Line Simplification (PLS) activities reduced organic revenue by 60 basis points. GAAP EPS increased nine percent to $1.99, including 11 cents divestiture gains from the sale of three businesses. Free cash flow was $692 million with a 114 percent conversion rate.  The effective tax rate for the fourth quarter was 22.8 percent.

Full year revenue of $14.1 billion declined 4.5 percent with organic revenue down 1.9 percent and unfavorable foreign currency translation impact of 2.3 percent. PLS reduced organic revenue by 60 basis points versus 70 basis points in 2018. 2019 GAAP EPS increased two percent to $7.74 including 9 cents of net gains from divestitures. After-tax return on invested capital was 28.7 percent. Free cash flow increased nine percent to $2.7 billion. The company repurchased $1.5 billion of its own shares and raised its dividend seven percent in August 2019 to an annualized $4.28 per share. The effective tax rate for the full year was 23.3 percent.

“The ITW team closed out 2019 with another quarter of strong execution and resilient financial performance,” said E. Scott Santi, chairman and CEO. “Despite near-term macro challenges, we grew earnings per share nine percent, delivered 24.1 percent operating margin excluding higher restructuring expenses and improved after-tax return on invested capital 120 basis points to 28.9 percent.”

“For the year, in a contracting industrial demand environment including a six percent decline in global auto builds, ITW grew earnings per share five percent excluding the impact of foreign currency headwinds, higher restructuring expenses and divestiture gains. We expanded operating margin to 24.4 percent excluding higher restructuring expenses, improved after-tax return on invested capital to 28.7 percent, increased free cash flow nine percent and returned $2.8 billion to shareholders in the form of dividends and share repurchases. Throughout 2019, we executed very well on the things within our control and continued to make meaningful progress on our path to full-potential performance through the implementation of our ‘Finish the Job’ enterprise strategy agenda. ITW’s proprietary and powerful business model, diversified high-quality business portfolio and dedicated team of highly skilled ITW colleagues around the world position us well to continue to deliver differentiated performance in 2020 and beyond,” Santi concluded.

2020 Guidance

The company initiated full-year EPS guidance in a range of $7.65 to $8.05 per share. At current levels of demand, organic growth is forecast to be in the range of zero to two percent. Foreign currency translation and divestitures are projected to reduce revenues by one percentage point each. PLS impact is forecast to moderate to approximately 50 basis points. Operating margin is expected to improve and be in a range of 24.5 to 25 percent, with enterprise initiatives contributing approximately 100 basis points. Free cash flow is expected to be greater than 100 percent of net income. The company expects an effective tax rate in the range of 23.5 to 24.5 percent and plans to repurchase approximately $2 billion of its shares in 2020. 

You May Also Like

LKQ Corporation Announces Results for Q2 2023

LKQ President and CEO Dominick Zarcone said wholesale businesses in North America and Europe produced high Q2 revenue.

financial results

LKQ Corporation reported its second quarter 2023 financial results, with revenue for Q2 2023 at $3.4 billion, an increase of 3.2% as compared to $3.3 billion in the second quarter of 2022.

“I am pleased to report strong operational performance for the quarter despite several headwinds, which is a testament to the strength and resilience of our diversified portfolio of businesses. Our largest segments, wholesale - North America and Europe, produced exceptional second quarter revenue growth and margins by focusing on operational excellence. These outstanding performances offset a steep year over year downturn in commodity prices impacting our self service segment and the decrease in demand for our specialty segment's offerings, headwinds that will impact these segments for the balance of 2023,” said Dominick Zarcone, president and CEO. “We also had excellent cash flow during the quarter. Taken as a whole, I am very pleased with the results and extremely proud of our global teams.”

Phinia Highlights Strategic Growth in Q2 Results

After completing its spinoff from BorgWarner, Phinia has secured new OE business and reported a 11.4% YoY sales growth.

SMP Announces Q2 2023 Results and Quarterly Dividend 

SMP continues to be bullish on long-term growth of its engineered solutions business, said President and CEO Eric Sills.

BorgWarner Shows Progress Toward Electric in Q2 Report

BorgWarner Inc. highlighted the ways it’s creating an electric future for its business through its “Charging Forward” plan.’s Q2 Results Driven By Digital Transformation

The second quarter of 2023 marked the highest sales level for any quarter in company history, said CEO David Meniane.

Other Posts

Eaton Reports Record Quarterly Results

In Q2, Eaton’s sales were $5.9 billion, a quarterly record and up 13% from Q2 2022, driven by organic sales growth.

Lear Reports Improved Second Quarter 2023 Results

Lear reported an 18% increase in sales compared to Q2 2022, as well as developments in thermal comfort systems.

Valeo Reports Strong First-Half OE & Aftermarket Sales

Valeo’s OE sales were up 19%, with aftermarket sales also exhibiting strong growth at a 5% increase.

Dana Inc. Reports Strong Q2 Financial Results

Dana Inc. reported sales of $2.75 billion, an increase of $162 million or 6 percent over last year.

financial results