Illinois Tool Works Inc. Announces Unaudited Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2017; Provides Earnings Guidance for the First Quarter and Full Year of 2018
January 24, 2018 at 08:00 am
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Illinois Tool Works Inc. announced unaudited earnings results for the fourth quarter and full year ended December 31, 2017. For the quarter, the company reported operating revenue of $3,629 million against $3,399 million a year ago. Operating income was $850 million against $742 million a year ago. Income before taxes was $796 million against $726 million a year ago. Net loss was $76 million against net income of $507 million a year ago. Basic and diluted loss per share was $0.22 against net income per diluted share of $1.45 a year ago. Adjusted operating income was $850 million against $742 million a year ago. Free cash flow was $617 million against $593 million a year ago. Adjusted net income was $582 million against $507 million a year ago.
For the year, the company reported operating revenue of $14,314 million against $13,599 million a year ago. Operating income was $3,494 million against $3,064 million a year ago. Income before taxes was $3,270 million against $2,908 million a year ago. Net income was $1,687 million against $2,035 million a year ago. Diluted net income per share was $4.86 against $5.70 a year ago. Adjusted operating income was $3,399 million against $3,064 million a year ago. Free cash flow was $2,105 million against $2,029 million a year ago. Adjusted net income was $2,345 million against $2,035 million a year ago.
The company provided earnings guidance for the first quarter and full year of 2018. The company forecasts first quarter 2018 GAAP earnings to be in the range of $1.80 to $1.90 per share with organic growth of 3% to 4%. As per usual, the guidance is based on current foreign exchange rates and the company are estimating a 24.5% to 25.5% tax rate.
The company is raising its 2018 full-year guidance by $0.40 at the midpoint to reflect the benefits of a reduction in the tax rate to an estimated range of 25% to 26% and current foreign exchange rates. The company expects 2018 GAAP earnings to be in the range of $7.45 to $7.65 per share with organic growth of 3% to 4%. Free cash flow conversion is expected to exceed 100% of net income and allocated $1 billion of surplus capital to share repurchases.
Illinois Tool Works Inc. is a diversified industrial group organized around 7 families of products:
- automotive equipment (20.1% of net sales). Besides, the group proposes products for maintenance and refurbishment (coatings, sealants, shutters, etc.);
- electronic equipment (17.5%): primarily equipment of microelectronic assembly. The group also provides test and measurement equipment and software;
- equipment for industrial kitchens (16.3%): cookers, dishwasher, ovens, refrigerators, cupboards, systems of aeration, etc.;
- construction systems and materials (12.6%): powder and gas nailing, perforators and consumables (fuses, chisels, pads, plugs, etc.) intended for applications on wood, steel and concrete;
- polymers, coatings, resins, adhesives and lubricants (11.2%);
- metallurgical equipment (10.5%): arc welding equipment, blowtorches, welding accessories, etc.
- specialty products (11.3%): industrial packaging systems and materials, products coding and marking equipment, etc.
Net sales are distributed geographically as follows: the United States (47.1%), North America (6.9%), Europe/Middle East/Africa (25.8%), Asia/Pacific (18.3%) and South America (1.9%).
Illinois Tool Works Inc. Announces Unaudited Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2017; Provides Earnings Guidance for the First Quarter and Full Year of 2018