Illinois Tool Works Q2 Profit Falls, Cuts Full-year View - Update

(RTTNews) - Industrial equipment maker Illinois Tool Works Inc. (ITW) Tuesday reported a decline in its second-quarter profit, reflecting lower revenues. The company also cut its earnings per share and revenue outlook for full year 2013.

Scott Santi, president and chief executive officer of the company said, "...For the balance of the year, while we remain cautious about end markets and revenue growth for some of our segments, we continue to have confidence in our ability to meet our profitability forecasts."

For the quarter, the company posted net income of $465 million or $1.03 per share, lower than $881 million or $1.85 per share in the previous year. Income from continuing operations for the prior year totaled $1.09 per share.

The latest-quarter included $0.05 of earnings per share dilution due to a pension settlement charge primarily related to the exit of Decorative Surfaces employees from the ITW pension plan.

Excluding the pension settlement charge, adjusted income from continuing operations for the recent quarter was $1.08 per share, while the company posted $1.02 per share in the prior year.

On average, 20 analysts polled by Thomson Reuters expected the company to earn $1.10 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted operating margins improved 40 basis points to 17.4 percent.

Operating revenues for the quarter declined to $4.22 billion from $4.46 billion in the year-ago quarter. Fourteen analysts had consensus revenue estimate of $4.29 billion. Total revenues increased 1.0 percent, excluding impact of Decorative Surfaces segment in 2012 results.

Looking ahead to the third quarter, the company forecast income per share from continuing operations to be in the range of $1.06 to $1.16. Revenues are anticipated to grow 3 to 5 percent. Analysts expect the company to report earnings of $1.13 per share for the third-quarter.

For full-year 2013, the firm now expects income per share from continuing operations to be in a range of $4.10 to $4.30, down from the prior guidance of $4.15 to $4.35 per share.

Total revenue growth is expected to be in a range of 0.5 to 2.5 percent, compared to the earlier outlook of 2 to 4 percent. Analysts expect the company to report earnings of $4.23 per share for 2013.

ITW is currently trading at $71.23, down $2.44 or 3.31 percent.