Engineered products manufacturer Illinois Tool Works Inc. (ITW) on Monday reaffirmed its forecast for income from continuing operations as well as revenue growth for the fourth quarter. The company also reported an 18% decline in operating revenue for the three months ended October 31, reflecting lower base revenues as well as currency translation.
The Glenview, Illinois-based company still forecasts income from continuing operations for the fourth quarter in a range of $0.54 to $0.66 per share. On average, 14 analysts polled by Thomson Reuters expects the company to report earnings of $0.62 per share for the fourth quarter, with estimates ranging between $0.57 and $0.68 per share. Analysts' estimates typically exclude special items.
Total revenues for the fourth quarter continues to be projected between a decline of 1% and a growth of 5% from the previous year, reflecting revenues between $3.64 billion and $3.86 billion, based on the reported revenues of $3.68 billion in the year-ago quarter.
While issuing the fourth-quarter forecast along with its third quarter results, the company had stated that it expects to incur between $25 million and $40 million of restructuring in the 2009 fourth quarter. The company also added that cumulative benefits of these restructuring programs will continue to help it in the 2009 fourth quarter and in 2010.
In its preceding third quarter, Illinois Tool Works, which consists of 895 business units in 54 countries and employs some 59,000 people, in mid-October posted a drop in net income to $302.42 million or $0.60 per share from $453.52 million or $0.87 per share last year, on a 19.8% decline in revenues to $3.58 billion, reflecting lower revenues across all business segments.
For the three months ended October 31, Illinois Tool Works said its base revenues dropped 17%, and there was a 4% decline in contributions from currency translation. Meanwhile, acquisitions contributed 3% to revenues in the three-month period.
The company pointed out that base revenues for the latest period modestly improved from the third quarter mainly due to ongoing improvements in discrete end markets such as automotive and construction.
On a segment basis, the company's three-month moving average percentage change in operating revenues for industrial packaging dropped 26.6% from last year, power systems and electronics fell 31.8% and transportation decreased 7.5%.
The three-month moving average percentage change in operating revenues for food equipment was down 11.6%, construction products declined 17.4%, polymers and fluids fell 19.1%, and decorative surfaces declined 17.3% from last year.
Earlier in the month, the company acquired the assets of Greenville, South Carolina-based Hartness International, with its core business of line integration, conveyor systems, and line automation for the beverage and food industries. Terms of the transaction were not disclosed. Hartness International will be a wholly owned business unit of the company and would be part of the company's consumer packaging group.
In end-October, Illinois Tool Works declared a regular quarterly cash dividend of $0.31 cents per share or $1.24 per share on an annual basis. The dividend will be payable on Tuesday, January 12, 2010 to stockholders of record on Thursday, December 31, 2009.
In Monday's regular trading session, ITW is currently trading at a 52-week high of $50.79, up $1.81 or 3.70% on a volume of 0.32 million shares. In the past 52-week period, the stock has been trading in a broad range of $25.60 to $50.79.
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