Zacks_Analysts' Blog : ITW's Nov-end Sales Update - Analyst Blog

Illinois Tool Works Inc.(ITW) reported a 10% year-over-year increase in its operating revenues for the three months ended November 30, 2011. The increase records a 4% growth, which can be ascribed to a hike in base revenue and 6% to acquisitions. Currency translation impact was negligible on revenue. End markets were strong with a solid demand for the company’s products.

Transportation revenue grew by 22% year over year, while revenue from Industrial Packaging rose by about 3%. Power Systems and Electronics segment registered an increase of 18%. Construction Products grew by 5% and Polymers and Fluids by 15%. Decorative Surfaces witnessed a 4% hike, while revenue from all other sources soared 5%. Food Equipment revenue, however, dropped by a percent.

Additionally, Illinois Tool Works reaffirmed its fiscal year 2011 guidance provided during the release of its third quarter 2011 financial results. Currency translation impact is expected to be nil. Earnings per share forecast stands at the 86-94 cents range with revenue growth varying within the 9.5% -12.5% range. 

For full-year 2011, earnings per share would probably be within the $4.04-$4.12 range based on total revenue growth assumption of 15.1%-15.9%. The full earnings forecast includes a 33 cent benefit related to the settlement of an Australian tax case in the first quarter of 2011. Excluding the tax gain, the mid point of the earnings range would be $3.75.

The current Zacks Consensus Estimate for the fourth quarter is 89 cents, representing a year-over-year increase of 12.57%. Estimates for the fiscal years 2011 and 2012 are $3.74 and $4.16, reflecting annual growth of 23.50% and 11.19%, respectively.

Illinois Tool Works is one of the leading manufacturers of industrial products and equipment. Other major players in the industry include Cooper Industries plc (CBE), General Electric Co. (GE), and Manitowoc Co. Inc. (MTW).

We currently maintain a Neutral recommendation on the stock.