Illinois Tool Works Q1 EPS Beat Estimations

Illinois Tool Works Inc. ITW reported net income of $468 million in the first quarter, up 2.2 percent from $258 million in the same quarter last year. Its earnings also advanced 6.6 percent to $1.29 a share from $1.21 a share in the previous year quarter. That topped the Street analysts' expectations by $0.03 a share.

The company's operating revenue dipped 2 percent to $3.27 billion from $3.34 billion in the year-ago quarter. This was higher than the Street predictions of $3.25 billion.

Illinois Tool Works' Chairman and CEO Scott Santi said, "We are pleased with ITW's strong start to 2016. In a challenging environment, the company continued to deliver meaningful improvement in all of our key performance metrics: organic growth, EPS, operating margin, return on invested capital, and free cash flow. Consistent with our strategy, we continue to execute the steps necessary to position the company to deliver solid above-market organic growth with best-in-class margins and returns."

He continued, "In the current economic environment and over the long-term, ITW's unique business model and our proven track record of operational execution position us very well for continued differentiated performance."

According to the company, among the highlights of the results, its operating margin grew 1.2 percentage points to a record of 22.1 percent as Enterprise Initiatives contributed 1.2 percentage points. Similarly, its organic revenue grew 1 percent as North America advanced 2 percent while International fell 1 percent.

Moving ahead, Illinois Tool said that it was lifting its full-year GAAP EPS outlook to $5.40 to $5.60 representing a 7 percent increase at the mid-point. There was no change in organic revenue growth forecast. Street predicts the company to earn $5.47 a share and $13.39 billion revenue.

For the second quarter, the company sees GAAP EPS to be $1.34 to $1.44 and organic revenue is forecast to be flat to up 2 percent. Analysts expect $1.26 a share.

In pre-marketing trading, the stock was higher by 1.26 percent following the news.