Illinois Tool Works
The 10-second takeaway
For the quarter ended March 31 (Q1), Illinois Tool Works missed estimates on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share dropped. GAAP earnings per share dropped significantly.
Gross margins increased, operating margins grew, net margins dropped.
Illinois Tool Works chalked up revenue of $4.01 billion. The 15 analysts polled by S&P Capital IQ expected to see revenue of $4.28 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $4.55 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.96. The 18 earnings estimates compiled by S&P Capital IQ predicted $0.96 per share. Non-GAAP EPS of $0.96 for Q1 were 1.0% lower than the prior-year quarter's $0.97 per share. (The prior-year quarter included $0.03 per share in earnings from discontinued operations.) GAAP EPS of $0.78 for Q1 were 22% lower than the prior-year quarter's $1.00 per share. (The prior-year quarter included $0.03 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 37.6%, 160 basis points better than the prior-year quarter. Operating margin was 16.5%, 100 basis points better than the prior-year quarter. Net margin was 8.8%, 190 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.50 billion. On the bottom line, the average EPS estimate is $1.12.
Next year's average estimate for revenue is $17.45 billion. The average EPS estimate is $4.26.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 762 members out of 789 rating the stock outperform, and 27 members rating it underperform. Among 244 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 240 give Illinois Tool Works a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Illinois Tool Works is outperform, with an average price target of $68.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Illinois Tool Works. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.