ITW Reports Fourth Quarter and Full Year 2012 Resu ITW Reports Fourth Quarter and Full Year 2012 Results and Issues 2013 Guidance
- Fourth quarter GAAP earnings per share (EPS) from continuing operations of $2.10 up significantly versus prior year quarter GAAP EPS of $0.90
- Fourth quarter Non-GAAP EPS from continuing operations of $0.89 up modestly versus prior year quarter Non-GAAP EPS of $0.88
- Free operating cash flow of $497 million generated during the quarter; $1.7 billion for the year
- 2013 full year EPS forecast range of $4.13 to $4.37, midpoint represents 13 percent EPS growth versus Pro Forma 2012 EPS
GLENVIEW, Ill., Jan. 29, 2013 /PRNewswire/ -- Illinois Tool Works Inc. (NYSE: ITW) today reported fourth quarter 2012 diluted income per share from continuing operations of $2.10, an increase versus 2011 fourth quarter earnings of $0.90. Excluding certain discrete items shown in the table below, adjusted EPS of $0.89 per share for the 2012 fourth quarter increased 1 percent compared to an adjusted EPS of $0.88 for the year-ago period.
Q4 2012 Results (GAAP vs. Non-GAAP)
2012 Actual Results (GAAP)
$2.10
Gain on divestiture of Decorative Surfaces
$1.37
Decorative Surfaces equity Interest
$(0.04)
Q4 discrete corporate items
$(0.04)
Q4 discrete tax items
$(0.08)
2012 Results (Non-GAAP)
$0.89
Fourth quarter 2012 financial and operating results versus the prior-year period included:
*Total revenues of $4.221 billion declined 2.3 percent largely due to the impact of the Decorative Surfaces divestiture and the negative impact of currency translation. Excluding the impact of divestitures, total revenues would have grown approximately 2 percent. Organic, or base revenues, increased 60 basis points, in line with Company expectations. By region, North American organic revenues grew 1.6 percent and international organic revenues decreased 0.5 percent. European organic revenues decreased 2.6 percent while Asia Pacific organic revenues increased 3.7 percent.
*The Transportation segment led the Company in organic growth, increasing 4.2 percent in the quarter. Notably, the worldwide automotive OEM business produced organic revenue growth of 10.9 percent, including organic growth of 12.4 percent in North America and 1.8 percent organic growth in Europe. The increase in European organic growth took place even as car builds in that region fell 7 percent in the quarter.
*Free operating cash flow totaled $497 million in the quarter. That represents a free cash to adjusted income from continuing operations conversion rate of 139 percent. The Company returned $954 million to shareholders via share repurchases of $604 million and dividend payments of $350 million.
"In 2012, we grew our adjusted earnings per share 10 percent and improved operating margins by 50 basis points," said E. Scott Santi, president and chief executive officer. "We also invested nearly $100 million in restructuring projects, many of which were related to the execution of our enterprise strategy and related initiatives - portfolio management, business structure simplification and strategic sourcing. As we detailed at our investor meeting in New York last month, through our enterprise strategy we are positioning the company to deliver solid growth as well as very strong operating margin and return on invested capital performance over the next five years."
Looking ahead, the Company believes full-year 2013 will be characterized by modest growth for both North American and international geographies. Total Company organic revenue growth is expected to be in a range of 1 percent to 3 percent. As part of its enterprise strategy in 2013, the Company also expects to spend $120 million to $140 million for restructuring activities. As a result, the Company is forecasting full-year diluted income per share from continuing operations to be in a range of $4.13 to $4.37. The midpoint of this earnings range would represent a 13 percent increase versus pro forma EPS of $3.76 for 2012. Full year total revenue growth is forecasted to be in a range of 3 percent to 5 percent. For the 2013 first quarter, the Company is forecasting diluted income per share from continuing operations to be in a range of $0.91 to $0.99. The midpoint of this earnings range would represent a 4 percent increase versus pro forma EPS of $0.91 for the first quarter of 2012. First quarter total revenue growth is forecasted to be in a range of flat to -2 percent. All 2013 revenue and EPS metrics compare to the Company's 2012 pro forma results, which are included in the attached exhibits.
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Analyst Estimates
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