Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

News Feed Item

ITW Reports Third Quarter 2013 Results

*Third quarter diluted EPS from continuing operations of $0.90 exceeds Company forecast midpoint of $0.88

GLENVIEW, Ill., Oct. 21, 2013 /PRNewswire/ -- Illinois Tool Works Inc. (NYSE: ITW) today reported third quarter diluted earnings per share (EPS) from continuing operations of $0.90, two cents higher than the midpoint of the Company's forecast.  As noted in the Company's September 24, 2013 announcement, the third quarter forecasted EPS midpoint of $0.88 included a $0.14 reduction from the Industrial Packaging segment moving to discontinued operations and a $0.09 reduction related to a discrete tax charge.

Highlights for 2013 third quarter results versus the prior-year period included:

*Total Company operating revenues were $3.6 billion while operating income was $678 million. Excluding the impact of Decorative Surfaces 2012 results, total Company operating revenues grew 2.9 percent and operating income increased 8.4 percent.  Organic revenues grew 0.4 percent, with international organic revenues growing 2.9 percent and North American organic revenues declining 1.4 percent. Internationally, Asia Pacific organic revenues grew 6.9 percent, with China organic revenues increasing 21.5 percent.  In addition, European organic revenues grew 1.0 percent. The Company was faced with a difficult year-over-year comparison in its electronics assembly platform, which negatively impacted total Company organic revenue growth by 2.5 percent. Reconciliations of GAAP to Non-GAAP results, which exclude the 2012 impact of the divested Decorative Surfaces segment, are included in the attached exhibits.

*By segment, highlights included:

  • Automotive OEM's organic revenues increased 11.5 percent, with strong growth across all regions. By comparison, worldwide auto builds increased 4 percent in the quarter. Automotive OEM operating margins improved 200 basis points to 21.1 percent.
  • Food Equipment's organic revenues grew 4.4 percent, with across-the-board contributions from the North American and international equipment and service businesses. Food Equipment operating margins improved 90 basis points to 19.9 percent.
  • Construction Products organic revenues increased 3.3 percent due to 9.3 percent organic revenue growth in North America. Operating margins improved 250 basis points to 16.2 percent.

"We were pleased with our financial performance in the quarter and the progress we continue to make in executing our Enterprise initiatives," said Scott Santi, president and chief executive officer. "Third quarter operating margins of 19.0 percent were driven by an 80 basis point contribution from our enterprise initiatives.  On a year-to-date basis, free cash flow conversion was solidly above 100 percent of net income, and our adjusted after-tax return on average invested capital was 16.3 percent, up 110 basis points versus the same period last year.  In addition, we continued to make disciplined, return-oriented decisions with regard to capital allocation.  We completed two strategically targeted acquisitions in the quarter, and year-to-date we have returned nearly $1.6 billion to shareholders in the form of share repurchases and dividends."

The Company is now forecasting its full-year diluted income per share from continuing operations to be in a range of $3.56-$3.64. This EPS range assumes a full-year total revenue growth range of 1.0 percent to 2.0 percent. For the 2013 fourth quarter, the Company is forecasting diluted income per share from continuing operations to be in a range of $0.85-$0.93 and assumes a total revenue growth range of 2 percent to 5 percent.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the amount of expected share repurchases, statements regarding total revenue growth, diluted income per share from continuing operations, operating margin growth, return on invested capital and end market conditions. These statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those anticipated.  Such factors include those contained in ITW's 2012  Form 10-K.

ITW is a Fortune 200 global diversified industrial manufacturer of value added consumables and specialty equipment with related service businesses. The Company focuses on solid growth and strong returns across its worldwide platforms and businesses. The businesses serve local customers and markets around the globe, with a significant presence in developed as well as emerging markets. ITW's adjusted revenues totaled $13.9 billion in 2012, with approximately half of the revenues generated outside of the United States.

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF INCOME (UNAUDITED)






Three Months Ended


Nine Months Ended

(In millions except per share amounts)

September 30,


September 30,


2013


2012


2013


2012

Operating Revenues

$

3,568


$

3,733


$

10,581


$

11,307

Cost of revenues

2,148


2,289


6,381


6,957

Selling, administrative, and research and development expenses

676


713


2,126


2,207

Amortization of intangible assets

64


62


186


190

Impairment of goodwill and other intangible assets

2


2


2


2

Operating Income

678


667


1,886


1,951

Interest expense

(60)


(52)


(179)


(152)

Other income (expense)

10


1


67


31

Income from Continuing Operations Before Income Taxes

628


616


1,774


1,830

Income Taxes

222


171


551


518

Income from Continuing Operations

406


445


1,223


1,312

Income from Discontinued Operations

46


79


48


579

Net Income

$

452


$

524


$

1,271


$

1,891









Income Per Share from Continuing Operations:








Basic

$

0.91


$

0.96


$

2.72


$

2.77

Diluted

$

0.90


$

0.95


$

2.70


$

2.75

Income Per Share from Discontinued Operations:








Basic

$

0.10


$

0.17


$

0.11


$

1.23

Diluted

$

0.10


$

0.17


$

0.11


$

1.22

Net Income Per Share:








Basic

$

1.01


$

1.13


$

2.83


$

4.00

Diluted

$

1.01


$

1.12


$

2.81


$

3.97









Shares of Common Stock Outstanding During the Period:








Average

445.9


464.8


449.0


473.2

Average assuming dilution

448.9


468.1


452.1


476.6









FREE OPERATING CASH FLOW

Three Months Ended


Nine Months Ended


September 30,


September 30,

(In millions)

2013


2012


2013


2012

Net cash provided by operating activities

$

811


$

635


$

1,820


$

1,467

Less: Additions to plant and equipment

(79)


(90)


(257)


(274)

Free operating cash flow

$

732


$

545


$

1,563


$

1,193

 

 


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION (UNAUDITED)


(In millions)

September 30, 2013


December 31, 2012





ASSETS




Current Assets:




Cash and equivalents

$

3,018


$

2,779

Trade receivables

2,493


2,742

Inventories

1,308


1,585

Deferred income taxes

391


332

Prepaid expenses and other current assets

421


522

Assets held for sale

1,951


Total current assets

9,582


7,960

Net Plant and Equipment

1,667


1,994

Goodwill

4,854


5,530

Intangible Assets

2,121


2,258

Deferred Income Taxes

353


391

Other Assets

1,174


1,176


$

19,751


$

19,309





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Short-term debt

$

1,328


$

459

Accounts payable

616


676

Accrued expenses

1,282


1,392

Cash dividends payable

187


Income taxes payable

75


116

Deferred income taxes

59


8

Liabilities held for sale

394


Total current liabilities

3,941


2,651





Noncurrent Liabilities:




Long-term debt

3,808


4,589

Deferred income taxes

453


244

Other liabilities

1,081


1,255

Total noncurrent liabilities

5,342


6,088





Stockholders' Equity:




Common stock

6


5

Additional paid-in-capital

1,032


1,012

Income reinvested in the business

14,716


13,973

Common stock held in treasury

(5,584)


(4,722)

Accumulated other comprehensive income

292


293

Noncontrolling interest

6


9

Total stockholders' equity

10,468


10,570


$

19,751


$

19,309

 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATIONS


(In millions except per share amounts)

Three Months Ended


Three Months Ended


September 30, 2013


September 30, 2012


Total Revenue

Operating Income

Operating Margin

Diluted EPS


Total Revenue

Operating Income

Operating Margin

Diluted EPS

Actual Results (GAAP)

$

3,568


$

678


19.0

%

$

0.90



$

3,733


$

667


17.9

%

$

0.95


Discrete tax charge related to foreign earnings




(0.09)







Decorative Surfaces operating results






267


41



0.06


Adjusted Results (Non-GAAP)

$

3,568


$

678


19.0

%

$

0.99



$

3,466


$

626


18.1

%

$

0.89












Q3 2013 Growth vs. 2012 (GAAP)

(4.4)

%

1.8

%

+110 bps

(5.3)

%






Q3 2013 Growth vs. 2012 (Non-GAAP)

2.9

%

8.4

%

+90 bps

11.9

%






 


(In millions except per share amounts)

Three Months Ended


Twelve Months Ended


December 31, 2012


December 31, 2012


Total Revenue


Operating Income


Diluted EPS


Total Revenue

Operating Income


Diluted EPS

Actual Results (GAAP)

$

3,484


$

524


$

1.99


$

14,791


$

2,475


$

4.72

Decorative Surfaces net gain



1.37




1.34

Decorative Surfaces equity interest (2012)



(0.04)




(0.04)

Decorative Surfaces operating results

93


12


0.01


921


143


0.21

Adjusted Results (Non-GAAP)

$

3,391


$

512


$

0.65


$

13,870


$

2,332


$

3.21













 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

ADJUSTED RETURN ON AVERAGE INVESTED CAPITAL




Three Months Ended


Nine Months Ended

(Dollars in millions)

September 30,


September 30,


2013


2012


2013


2012

Operating income

$

678



$

667



$

1,886



$

1,951


Adjustment for Decorative Surfaces



(41)





(131)


Adjusted operating income

678



626



1,886



1,820


Tax rate (as adjusted for discrete tax charge in 2013)

29.0

%


27.8

%


28.8

%


28.3

%

Taxes

(196)



(174)



(543)



(515)


Adjusted operating income after taxes

$

482



$

452



$

1,343



$

1,305










Invested capital:








Trade receivables

$

2,493



$

3,062



$

2,493



$

3,062


Inventories

1,308



1,760



1,308



1,760


Net plant and equipment

1,667



2,081



1,667



2,081


Goodwill and intangible assets

6,975



7,808



6,975



7,808


Accounts payable and accrued expenses

(1,898)



(2,274)



(1,898)



(2,274)


Net assets held for sale

1,557





1,557




Other, net

484



767



484



767


Total invested capital

$

12,586



$

13,204



$

12,586



$

13,204










Average invested capital

$

12,560



$

13,260



$

12,648



$

13,241


Adjustment for Decorative Surfaces

(169)



(296)



(170)



(299)


Adjustment for Industrial Packaging

(1,468)



(1,500)



(1,482)



(1,508)


Adjusted average invested capital

$

10,923



$

11,464



$

10,996



$

11,434


Annualized return on average invested capital

17.6

%


15.8

%


16.3

%


15.2

%









 



Three Months Ended


(Dollars in millions)

September 30, 2013



Income from Continuing Operations Before Income Taxes


Income Taxes


Tax Rate

As reported

$

628



$

222



35.4

%

Discrete tax charge related to foreign earnings



(40)



(6.4)

%

As adjusted

$

628



$

182



29.0

%














Nine Months Ended


(Dollars in millions)

September 30, 2013



Income from Continuing Operations Before Income Taxes


Income Taxes


Tax Rate

As reported

$

1,774



$

551



31.1

%

Discrete tax charge related to foreign earnings



(40)



(2.3)

%

As adjusted

$

1,774



$

511



28.8

%







 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)


Three Months Ended September 30, 2013

% F(U) vs. prior year


(Dollars in millions)

Total Revenue

Operating Income

Operating Margin


Total Revenue

Organic (Base) Revenue

Operating Margin

Test & Measurement and Electronics

$

555


$

91


16.3

%


(10.9)

%

(11.8)

%

(190)

bps

Automotive OEM

589


124


21.1

%


13.2

%

11.5

%

200

bps

Polymers & Fluids

504


91


18.1

%


(1.1)

%

%

220

bps

Food Equipment

542


108


19.9

%


10.4

%

4.4

%

90

bps

Welding

438


111


25.4

%


(1.0)

%

(3.5)

%

90

bps

Construction Products

440


71


16.2

%


1.7

%

3.3

%

250

bps

Specialty Products

510


108


21.1

%


11.4

%

1.9

%

150

bps

Intersegment

(10)









Total Segments

3,568


704


19.7

%


2.9

%

0.4

%

110

bps

Decorative Surfaces





(100)

%

(100)

%


Unallocated


(26)








Total Company

$

3,568


$

678


19.0

%


(4.4)

%

0.4

%

110

bps



Nine Months Ended September 30, 2013

% F(U) vs. prior year


(Dollars in millions)

Total Revenue

Operating Income

Operating Margin


Total Revenue

Organic (Base) Revenue

Operating Margin

Test & Measurement and Electronics

$

1,617


$

233


14.4

%


(7.3)

%

(8.3)

%

(100)

bps

Automotive OEM

1,792


367


20.5

%


9.7

%

8.9

%

90

bps

Polymers & Fluids

1,521


259


17.1

%


(3.8)

%

(3.5)

%

120

bps

Food Equipment

1,500


278


18.5

%


4.2

%

1.1

%

130

bps

Welding

1,390


361


26.0

%


(1.2)

%

(3.1)

%

(20)

bps

Construction Products

1,295


180


13.9

%


(0.6)

%

0.1

%

200

bps

Specialty Products

1,497


317


21.2

%


6.7

%

1.3

%

100

bps

Intersegment

(31)









Total Segments

10,581


1,995


18.9

%


1.0

%

(0.6)

%

80

bps

Decorative Surfaces





(100)

%

(100)

%


Unallocated**


(109)








Total Company

$

10,581


$

1,886


17.8

%


(6.4)

%

(0.5)

%

50

bps

 ** Includes 2Q 2013 $34 million pension settlement charge

 

SOURCE Illinois Tool Works Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that Datera will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera offers a radically new approach to data management, where innovative software makes data infrastructure invisible, elastic and able to perform at the highest level. It eliminates hardware lock-in and gives IT organizations the choice to source x86 server nodes, with business model option...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, will discuss how from store operations...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, will discuss some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he’ll go over some of the best practices for structured team migrat...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they bu...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
SYS-CON Events announced today that Avere Systems, a leading provider of hybrid cloud enablement solutions, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere Systems was created by file systems experts determined to reinvent storage by changing the way enterprises thought about and bought storage resources. With decades of experience behind the company’s founders, Avere got its ...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
SYS-CON Events announced today that Ryobi Systems will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ryobi Systems Co., Ltd., as an information service company, specialized in business support for local governments and medical industry. We are challenging to achive the precision farming with AI. For more information, visit http:...
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, will discuss how by using...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japanese Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ruby Development Inc. builds new services in short period of time and provides a continuous support of those services based on Ruby on Rails. For more information, please visit https://github.com/RubyDevInc.
SYS-CON Events announced today that CAST Software will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CAST was founded more than 25 years ago to make the invisible visible. Built around the idea that even the best analytics on the market still leave blind spots for technical teams looking to deliver better software and prevent outages, CAST provides the software intelligence that matter ...
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.