This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Illinois Tool Works Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: ITW

Now let's move to our second quarter results. We were very pleased with our strong second quarter operating performance despite end markets slowing in a variety of international end markets and the significant currency headwinds we faced in the quarter. Thanks our differentiated 80/20 operational focus, our business has produced very strong operating margin improvement in the second quarter due to excellent management of input and overhead costs. We also continued to return significant levels of cash our shareholders through our share repurchase program, as well as our strong dividend payout.

Looking ahead to the second half 2012. We lowered our EPS forecast range, given the ongoing negative impact of currency translation and the expected continuing sluggish demand in the international end markets, as well as additional restructuring expenditures that will now total over $100 million for the year. Ron will cover our forecast in detail later in the call.

Now let me hand it over to Ron, who will talk about the strong second quarter performance. Ron?

Ronald D. Kropp

Thank you, David, and good morning, everyone. Here are the highlights for the second quarter. Revenues increased 0.9% due to higher base in acquisition revenues offset by the unfavorable impact from currency. Operating income was $770 million, which was higher than last year by $59 million, representing income growth of 8%. Operating margins of 16.5% were 110 basis points higher compared to last year. Diluted income per share for continuing operations was $1.11, which was close to the midpoint of our range. Finally, free operating cash flow is $409 million for the quarter.

Now let's go to the components of our operating results. Our 0.9% revenue increase was primarily due to the following factors. Base revenues were up 2.3%, with North American base revenues increasing 5.3% and mixed international base revenues that overall were down slightly year-over-year. John will discuss the geographic mix in more detail later in the call. Acquisitions net of divestitures added 3% to revenue growth and currency translation decreased revenues by 4.5%, largely due to a weaker euro.

Read the rest of this transcript for free on

3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs