Illinois Tool Works Sales Hit by Currency Pressures

By Michael Calia 

Illinois Tool Works Inc. said foreign currency pressures weighed on its sales in the most recent quarter, although its profit increased as costs declined.

The diversified manufacturer, which backed its guidance for the year, has sought to scale back its business portfolio by shedding slower-growing assets, including its $3.2 billion sale of its industrial packaging business last year.

Its automotive group, meanwhile, has been the strongest performer of late as the U.S. auto industry has continued to post robust sales and demand. Revenue for the segment rose 2.7% to $620 million in the most recent quarter.

ITW said its earnings for the period were $450 million, or $1.16 a share, up from $408 million, or 93 cents a share, a year ago. On the basis of continuing operations, the company posted $1.18 a share in earnings.

Revenue fell 1.4% to $3.5 billion, reflecting negative currency effects. Organic revenue rose 2.3%.

ITW in October had projected per-share earnings of $1.07 to $1.15 and flat revenue.

The company said organic revenue growth in North America was driven by welding, food equipment and automotive OEM demand.

Input costs fell 2.7%, while selling, administrative and research and development expenses declined 6.5%.

Write to Michael Calia at [e-mail]

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