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Illinois Tool Works: Itw Reports Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

EPS of $1.39, up 9 percent; up 18 percent excluding $(0.12) of currency headwinds

Record operating margin of 22.7 percent, up 180 basis points; Enterprise Initiatives contribute 110 basis points

Strong free cash flow conversion at 126 percent of net income

Record after-tax return on invested capital of 21.5 percent

GLENVIEW, Ill., October 21, 2015 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported third quarter 2015 diluted earnings per share (EPS) from continuing operations of $1.39, a 9 percent increase compared to the year-ago period. Organic revenue was down 1.7 percent in the quarter as continued solid organic growth performance in Automotive OEM, Food Equipment and Construction Products was offset by deteriorating end market trends in Welding and Test & Measurement and Electronics. In addition, the company’s ongoing Product Line Simplification (PLS) activities reduced organic growth by 1 percentage-point.

"ITW delivered another strong quarter of margin expansion and earnings per share growth," said E. Scott Santi, chairman and chief executive officer. "In the quarter, ITW set new all-time records for operating margin and after-tax return on invested capital and grew EPS by 9 percent. In addition, free cash flow conversion was very strong at 126 percent. Due to ITW’s unique business model and proven track record of operational execution, the company is well positioned to continue to deliver differentiated performance in both the current environment and over the long-term.”

Third quarter 2015 enterprise highlights*

EPS increased 9 percent to $1.39. Excluding $(0.12) impact from foreign currency headwinds, EPS would have been up 18 percent.

Operating margin increased 180 basis points to a record of 22.7 percent as Enterprise Initiatives contribute 110 basis points.

Free cash flow was $644 million, 126 percent of net income.

After-tax return on invested capital improved 140 basis points to a record of 21.5 percent.

Total revenues of $3.4 billion were down 9 percent primarily due to the impact of foreign currency translation.

Third quarter 2015 segment performance*

Automotive OEM organic revenue growth of 5 percent outpaced flat worldwide auto builds. Organic revenue increased 12 percent in Europe, 5 percent in North America and declined 5 percent in China. Operating margin of 25.4 percent was up 200 basis...


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