Illinois Tool Works Inc. (ITW) has reported a 12.67 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $507 million, or $1.45 a share in the quarter, compared with $450 million, or $1.23 a share for the same period last year.
Revenue during the quarter grew 3.79 percent to $3,399 million from $3,275 million in the previous year period. Gross margin for the quarter expanded 25 basis points over the previous year period to 40.98 percent. Total expenses were 78.17 percent of quarterly revenues, down from 79.27 percent for the same period last year. This has led to an improvement of 110 basis points in operating margin to 21.83 percent.
Operating income for the quarter was $742 million, compared with $679 million in the previous year period.
"The fourth quarter closed out a year of record financial performance and strong execution by the ITW team. In 2016, we grew EPS 11%, improved operating margin by 110 basis points to an all-time high of 22.5% and increased after tax return on invested capital 170 basis points to a record 22.1%," said E. Scott Santi, chairman and chief executive officer. "Throughout 2016, we continued to invest in our businesses to sustain above-market organic growth, strengthened our highly differentiated business portfolio and returned more than $2.8 billion of surplus capital to shareholders. We continue to work hard to push our performance to best-in-class levels, and we are well-positioned to deliver continued progress and strong results in 2017."
For financial year 2017, Illinois Tool Works Inc. forecasts revenue to grow in the range of 1.50 percent to 3.50 percent. It forecasts operating income to grow at 23.50 percent. It expects diluted earnings per share to be in the range of $6 to $6.20 for the same period.
For the first-quarter, Illinois Tool Works Inc. forecasts revenue to grow in the range of 1 percent to 2 percent. It forecasts operating income to grow at 22.50 percent. It expects diluted earnings per share to be in the range of $1.39 to $1.49 for the same period.
Working capital declines
Illinois Tool Works Inc. has witnessed a decline in the working capital over the last year. It stood at $3,363 million as at Dec. 31, 2016, down 22.73 percent or $989 million from $4,352 million on Dec. 31, 2015. Current ratio was at 2.22 as on Dec. 31, 2016, down from 2.84 on Dec. 31, 2015.
Debt moves up
Illinois Tool Works Inc. has witnessed an increase in total debt over the last one year. It stood at $7,829 million as on Dec. 31, 2016, up 5.48 percent or $407 million from $7,422 million on Dec. 31, 2015. Total debt was 51.50 percent of total assets as on Dec. 31, 2016, compared with 47.19 percent on Dec. 31, 2015. Debt to equity ratio was at 1.84 as on Dec. 31, 2016, up from 1.42 as on Dec. 31, 2015. Interest coverage ratio improved to 11.78 for the quarter from 11.71 for the same period last year.
Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
