Illinois Tool Works Q1 Profit Up 34%, Beats View; Lifts Earnings Outlook

(RTTNews) - Industrial equipment maker Illinois Tool Works Inc. (ITW) on Tuesday reported a 34 percent increase in profit for the first quarter from last year, reflecting higher revenues and margins as well as accelerated share repurchase.

Earnings per share from continuing operations for the quarter beat analysts' estimates. Looking ahead to fiscal 2014, the company raised its earnings per share outlook as well as the lower end of its revenue forecast range.

The company's net income for the first quarter rose to $473 million or $1.11 per share from $354 million or $0.78 per share in the year-ago period.

Earnings from continuing operation increased to $428 million or $1.01 per share from $401 million or $0.88 per share a year ago. On average, eighteen analysts polled by Thomson Reuters expected the company to earn $0.98 per share for the quarter. Analysts' estimates typically exclude special items.

According to the company, the stronger-than-expected earnings per share was driven by meaningful contributions from ongoing enterprise initiatives and accelerated share repurchase.

Total operating revenues for the quarter rose 4 percent to $3.57 billion from $3.42 billion in the year-ago period. Analysts had a consensus revenue estimate for the quarter of $3.57 billion.

Organic revenues for the quarter increased 3.3 percent, with international revenues rising 6.3 percent and North America revenues increasing 1.0 percent. Internationally, European and Asia Pacific organic revenues grew 4.8 percent and 7.2 percent, respectively.

Operating income for the quarter rose 16 percent from the year-ago period to $667 million, while operating margin increased 180 basis points to 18.7 percent.

Looking ahead to the second quarter, Illinois Tool Works forecasts earnings in a range of $1.16 to $1.24 per share, on revenue growth of 3 percent to 5 percent. Analysts expect the company to earn $1.16 per share for the quarter on revenues of $3.76 billion.

For fiscal 2014, Illinois Tool Works raised its outlook for earnings to a range of $4.45 to $4.65 per share from the prior range of $4.30 to $4.50 per share, with the $4.55 mid-point for the revised outlook representing a 25 percent increase versus last year. The company said the revised forecast is driven by the accelerated share repurchase program as well as continued contributions from enterprise initiatives.

The company now forecasts total revenue for the full-year to grow in a range of 3 percent to 4 percent, compared to the prior range of 2 percent to 4 percent.

Street expects the company to earn $4.45 per share for the year on revenues of $14.75 billion.

ITW closed Monday's trading at $84.60. In Tuesday's pre-market, the stock is up $1.93 or 2.28 percent to $86.51.