Illinois Tool Works Lifts FY16 EPS View As Q2 Results Top Estimates

(RTTNews) - Illinois Tool Works Inc. (ITW), a manufacturer of industrial products and equipment, on Wednesday raised its earnings forecast for fiscal 2016 by $0.10 after reporting higher profit in its second quarter, above market estimates.

The company now expects full-year earnings per share between $5.50 and $5.70, a year-over-year increase of 9 percent at the mid-point. The previous forecast was $5.40 to $5.60 per share.

On average, 21 analysts polled by Thomson Reuters expect earnings of $5.52 per share for the year. Analysts' estimates typically exclude special items. 1.28

Further, the company narrowed its full-year organic growth forecast to 1 to 2 percent from previous estimate of 1 percent to 3 percent as a result of the lingering difficult market conditions being experienced by the Welding segment.

Operating margin is expected to exceed 22.5 percent for the full year.

For the third quarter 2016, the company expects earnings per share to be in a range of $1.42 to $1.52, and operating margin to be approximately 23 percent. Organic revenue is forecast to be up 1 to 3 percent. Analysts expect earnings of $1.46 per share for the quarter.

For the second quarter, net income climbed to $525 million or $1.46 per share from last year's $480 million or $1.30 per share. Operating revenue edged down 0.1 percent to $3.431 billion from $3.434 billion last year. Analysts expected earnings of $1.40 per share for the quarter on revenues of $3.41 billion. Currency translation reduced revenue by 1.3 percent.

Organic revenue grew 1.2 percent, as North America grew 0.4 percent and International grew 2.2 percent.

Operating income of $792 million was up 8 percent, and operating margin increased 180 basis points to 23.1 percent.