Earnings Preview: Illinois Tool Works

Illinois Tool Works (ITW) is expected to report Q3 earnings on Tuesday, October 20 before the market open with a conference call scheduled for 1 pm ET.

Guidance

Analysts are looking for EPS of 53c on revenue of $3.56B. The consensus range is 50c-57c for EPS, and $3.4B-$3.65B for revenue, according to First Call. In mid September the company raised its Q3 EPS view to 48c-56c from 39c-51c vs. consensus 47c. The company previously said it expects Q3 revenue to be down 2% to up 4% vs. Q209, and expects to reinstate full-year guidance when longer-term visibility becomes more reliable. Recently the company said it sees modest Q3 improvement in discrete end markets, including automotive and construction, and is taking a long-term view in spite of short-term difficulties. The company will continue to implement a number of restructuring programs across all businesses and geographies to "right size". Illinois Tool Works margins benefited in Q2 and are expected to further improve going forward. The company also noted due to its strong financial position and cash flow, that it's ready to capitalize on growth opportunities and acquisitions when conditions improve.