ITW Outlines its Outlook - Analyst Blog
17 Dicembre 2012 - 11:40AM
Zacks
Illinois Tool Works
Inc. (ITW) in its recently held annual investors’ meeting
announced a revision in its guidance (issued in October 2012) for
the fourth quarter and the full year 2012.
Though revenue growth outlook was
kept unchanged at (1%)-(4%) for the fourth quarter and 0%-1.0% for
2012, the company increased its guidance for earnings per share
from continuing operations from a range of 86-94 cents to
$1.99-$2.09. For 2012, earnings per share are now projected to be
within $5.19-$5.29 range as compared with $4.06-$4.14 expected
earlier.
The revised earnings guidance
includes net gains from the divestiture of Decorative Surfaces as
well as equity interest on it. Excluding these, the company also
takes into account some discrete corporate and tax items, taking
its earnings guidance to the 86-94 cents range for the fourth
quarter and $4.06-$4.14 for 2012.
Revisions were also seen in tax
rate that went up from the 28.5%-29.5% range to the 33.5%-34.5%
range for the fourth quarter and from the range of 28.5%-29.5% to
30.5%-31.5% range for 2012. Restructuring expenses for the year was
reiterated at the $100-$110 million range.
For 2013, the company came up with
its organic revenue growth forecast in the range of 1% to 3%. Sales
in North America is expected to grow 2% to 4% while Asia Pacific
& Other in the range of 2% to 4%. European business is
predicted to remain flat.
Illinois Tool’s goals for a five
year period from 2012 to 2017 were also declared at the meeting.
The company targets the following: organic growth to be 200 basis
points above industrial production by 2017; operating margins and
return on invested capital to be above 20% by 2017; 100% free cash
flow conversion and 12% earnings per share CAGR beyond 2017.
Illinois Tool Works is one of the
leading manufacturers of industrial products and equipment
operating through 800 business units in 57 countries. We currently
maintain a Neutral recommendation on the company. The stock also
bears a Zacks #3 Rank, implying a short-term Hold rating. Its prime
competitor General Electric Co. (GE) has a Zacks
#4 Rank (Sell) while Manitowoc Co. Inc. (MTW) has
a Zacks #3 (Hold) Rank.
GENL ELECTRIC (GE): Free Stock Analysis Report
ILL TOOL WORKS (ITW): Free Stock Analysis Report
MANITOWOC INC (MTW): Free Stock Analysis Report
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