Illinois Tool Works Inc. (ITW) reported an 11% year-over-year rise in its operating revenues for the three months ended February 28, 2011. The increase records a 9% growth, which can be ascribed to a hike in base revenue and 3% to acquisitions. Currency translation had a negative 1.0% impact on the revenue. End markets were strong with a solid demand for the company’s products.
Transportation revenue grew by 15.7% year over year, while Industrial Packaging by about 13.2%. Power Systems and Electronics registered an increase of 16.5%. Construction Products grew by 11.4% and Polymers and Fluids by 12.2%. Revenue from all other sources soared 12.9%. Decorative Surfaces grew by 4.4% while Food Equipment alone plunged 1.6% year over year.
Additionally, Illinois Tool Works restated its 2010 financial figures and provided earnings and revenue outlook for the first quarter and the fiscal year 2011, taking into account the elimination of one month lag for international results reporting. The company will now report both North American and international results on a calendar year basis in contrast to international reporting period beginning in December and ending November.
Earnings per share (EPS) from continuing operations for the fiscal year 2010 were revised to $2.99 versus $3.03 reported earlier. For the first quarter of 2011, EPS from continuing operations are likely to range within $1.14-$1.20, including 33 cents per share (or $166 million) of favorable discrete tax adjustment relating to Australian tax court decision in February 2011. Total revenue growth is expected to range within 12%-15%.
For the full year 2011, EPS from continuing operations are expected to be $3.93-$4.17, with total revenue growth ranging within 11.5%-14.5%.
Illinois Tool Works is one of the leading manufacturers of industrial products and equipment. We believe that the company’s growth stems from its ability to develop new and improved products as well as broadening the range of application of established products. Improvising and developing new methods, processes and equipment along with acquisitions give the company a big push.
The company’s prime competitors include the likes of Cooper Industries plc (CBE), General Electric Co. (GE) and Manitowoc Co. Inc. (MTW). We currently maintain our Neutral recommendation on the stock.
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