Summary:
Illinois Tool Works’ second-quarter 2014 earnings increased 31.5% year to year to $1.21 per share, surpassing the Zacks Consensus Estimate of $1.20. Shares buyback associated with the divestiture of the Industrial Packaging business boosted earnings growth. Revenues climbed 3.5% on the back of 1.4% organic growth. Of segments, Automotive OEM, Test & Measurement and Electronics, Food Equipment and Specialty Products performed well. Operating margin went up 300 basis points (bps), including 120 bps contribution from enterprise strategies. For 2014, management increased its earnings guidance to the range of $4.50-$4.62 per share while total revenue growth is predicted within 3-4%. Considering all these factors, we currently maintain a Neutral recommendation on the stock.(…)
