Illinois Tool Works
The 10-second takeaway
For the quarter ended June 30 (Q2), Illinois Tool Works missed slightly on revenues and missed slightly on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share shrank slightly. GAAP earnings per share contracted significantly.
Gross margins expanded, operating margins expanded, net margins shrank.
Illinois Tool Works reported revenue of $4.22 billion. The 16 analysts polled by S&P Capital IQ looked for net sales of $4.30 billion on the same basis. GAAP reported sales were 9.4% lower than the prior-year quarter's $4.66 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 $1.08. The 20 earnings estimates compiled by S&P Capital IQ predicted $1.10 per share. Non-GAAP EPS of $1.08 for Q2 were 2.7% lower than the prior-year quarter's $1.11 per share. (The prior-year quarter included $0.74 per share in earnings from discontinued operations.) GAAP EPS of $1.03 for Q2 were 44% lower than the prior-year quarter's $1.85 per share. (The prior-year quarter included $0.74 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 37.9%, 160 basis points better than the prior-year quarter. Operating margin was 16.6%, 10 basis points better than the prior-year quarter. Net margin was 11.0%, 790 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.24 billion. On the bottom line, the average EPS estimate is $1.13.
Next year's average estimate for revenue is $16.75 billion. The average EPS estimate is $4.24.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 762 members out of 788 rating the stock outperform, and 26 members rating it underperform. Among 260 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 256 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 $69.69.
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