ITW Q4 Earnings Released Today
Illinois Tool Work Inc. (NYSE-ITW) is an American Fortune 500 company that produces engineering fasteners and components, equipment and consumable systems and specificity products. The Company released Quarter (Q4) earnings report and full year balance sheet with EPS report for last quarter ended on December 31, 2019.
Key Highlights of ITW Q4 Earnings
- GAAP EPS $1.99, an increase of 9%, including $0.11 of divestiture gains
- Total revenue declined 3.1%; organic revenue down 1.6%
- Operating margin of 23.7%; 24.1% excluding 40 basis points of higher restructuring expenses
- After-tax ROIC of 28.9%, an increase of 120 basis points
- Free cash flow was 114% of net income
Illinois Tool Works (ITW) Full Year 2019 earnings Data
- GAAP EPS $7.74, an increase of 2%
- Total revenue declined 4.5%; organic revenue down 1.9%
- Operating margin of 24.1%; 24.4% excluding 30 basis points of higher restructuring expenses
- After-tax ROIC of 28.7%, an increase of 50 basis points
- Free cash flow increased 9% and was 106% of net income
“The ITW team closed out 2019 with another quarter of strong execution and resilient financial performance,” said E. Scott Santi, chairman and chief executive officer. “Despite near-term macro challenges, we grew earnings per share nine percent, delivered 24.1 percent operating margin excluding higher restructuring expenses and improved after-tax return on invested capital 120 basis points to 28.9 percent.”
“For the year, in a contracting industrial demand environment including a six percent decline in global auto builds, ITW grew earnings per share five percent excluding the impact of foreign currency headwinds, higher restructuring expenses and divestiture gains. We expanded operating margin to 24.4 percent excluding higher restructuring expenses, improved after-tax return on invested capital to 28.7 percent, increased free cash flow nine percent and returned $2.8 billion to shareholders in the form of dividends and share repurchases. Throughout 2019, we executed very well on the things within our control and continued to make meaningful progress on our path to full-potential performance through the implementation of our ‘Finish the Job’ enterprise strategy agenda. ITW’s proprietary and powerful business model, diversified high-quality business portfolio and dedicated team of highly skilled ITW colleagues around the world position us well to continue to deliver differentiated performance in 2020 and beyond,” Santi concluded.
ITW Balance Sheet Result 2019 :
Fourth-quarter revenue of $3.5 billion declined 3.1 percent with organic revenue down 1.6 percent. Foreign currency translation and divestitures reduced revenues by 1.0 percent and 0.5 percent, respectively. Product Line Simplification (PLS) activities reduced organic revenue by 60 basis points. GAAP EPS increased nine percent to $1.99 including $0.11 divestiture gains from the sale of three businesses. Operating margin was 23.7 percent. Excluding 40 basis points impact from higher restructuring expenses, operating margin improved 10 basis points to 24.1 percent. Enterprise initiatives contributed 130 basis points and price/cost was positive 30 basis points. Free cash flow was $692 million with a 114 percent conversion rate. The effective tax rate for the fourth quarter was 22.8 percent.
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Full year revenue of $14.1 billion declined 4.5 percent with organic revenue down 1.9 percent and unfavorable foreign currency translation impact of 2.3 percent. PLS reduced organic revenue by 60 basis points versus 70 basis points in 2018. 2019 GAAP EPS increased two percent to $7.74 including $0.09 of net gains from divestitures. Operating margin was 24.1 percent. Excluding 30 basis points impact from higher restructuring expenses, operating margin improved 10 bps to 24.4 percent. Enterprise initiatives contributed 120 basis points and price/cost was positive 10 basis points. After-tax return on invested capital was 28.7 percent. Free cash flow increased nine percent to $2.7 billion. The company repurchased $1.5 billion of its own shares and raised its dividend seven percent in August 2019 to an annualized $4.28 per share. The effective tax rate for the full year was 23.3 percent.
News Source : Globenewswire