GLENVIEW, Ill. – Illinois Tool Works Inc. (ITW) has reported third quarter 2014 earnings per share (EPS) from continuing operations of $1.28, 42 percent higher than the year-ago period. The company said this strong growth in EPS was due to ongoing contributions from enterprise initiatives, solid organic revenue growth and continuing share repurchase activity.
Total revenues grew 3.5 percent to $3.7 billion and operating income increased 14 percent to $772 million, the highest quarterly operating income total in the company’s history. Organic revenues grew 3.5 percent, with North American and international growth of 4 percent and 3 percent, respectively.
In North America, organic revenue growth was driven by strength in the automotive OEM, food equipment, welding and test and measurement businesses. Internationally, European organic revenues increased 3 percent and Asia Pacific grew 5 percent.
The company added that, as expected, ongoing product line simplification activities associated with the portfolio management component of ITW’s enterprise strategy reduced organic revenue growth by approximately 1 percent in the quarter.
“ITW had a strong third quarter with solid organic revenue growth, operating margins hitting record levels, EPS increasing more than 40 percent and after tax return on invested capital exceeding 20 percent,” said Scott Santi, president and CEO. “These results reflect continued progress in the execution of our enterprise strategy as we position ITW for solid organic growth with best-in-class margins and returns. Looking ahead, we are raising full year guidance as we expect operating margins of approximately 20 percent and EPS to increase by more than 25 percent. The ITW operating team continues to execute at a high level, and we thank all of our people around the world for their dedication and ongoing contributions to our progress.”
The company is raising its full-year EPS guidance range to $4.57 to $4.65 from $4.50 to $4.62. For the 2014 fourth quarter, the company is forecasting EPS to be in a range of $1.07 to $1.15, on 2 to 3 percent organic revenue growth. Total revenue growth in the fourth quarter is projected to be flat due to currency translation effects.
