Shares of Illinois Tool Works Inc. fell Wednesday after it reported fourth-quarter earnings that met estimates, but unsettled investors with a disappointing profit forecast for what it predicted will be a “challenging” 2008.
Although the Glenview-based diversified manufacturer has operations in nearly 50 countries and is expanding its international presence, it has substantial exposure to the U.S. automotive and housing sectors. Because those industries are experiencing weak conditions, or worse than weak in the case of the deeply depressed housing sector, ITW’s profits have been under pressure.
“Despite slowing in a number of North American end markets, we were helped by the strength of our international end markets and improved contributions from our acquisitions,” said Chairman and Chief Executive David Speers.
ITW had net income of $470.7 million, or 87 cents a diluted share, up 7 percent from the year ago’s $439.3 million, or 77 cents a share.
Revenue increased 19 percent, to $4.24 billion, though the company noted that the bulk of that increase was attributable to the contribution from acquisitions and from favorable foreign-currency conversion rates. ITW, which has an aggressive growth-though-acquisition strategy, said base revenue, which excludes sales from operations owned less than a year, grew just 2.5 percent.
Investors were disappointed with ITW’s projection that first-quarter earnings will be between 72 cents and 78 cents a share, with full-year per-share earnings between $3.47 and $3.61. That guidance is below analysts’ forecasts of the 81 cents for the first quarter and $3.67 for all of 2008.
Shares of ITW declined by as much as 4 percent but rallied a bit in the wake of the Federal Reserve’s latest interest rate cut to close at $49.48, off $1.16, or 2.3 percent, on the New York Stock Exchange.
Other earnings news
FTD Group Inc. reported second-quarter profit that exceeded analysts’ estimates and boosted its full-year earnings forecast, sending its shares to their best gain ever.
The Downers Grove-based flower-delivery service said net income jumped 47 percent, to $9 million, or 30 cents a share, 3 cents a share higher than estimates. A year ago, FTD earned $6.1 million, or 21 cents a share. Revenue rose 2.6 percent, to $155.5 million.
The company also boosted its full-year earnings forecast to $1.35 a share from a previous estimate of $1.23 a share in November. Wall Street is expecting $1.29 a share.
FTD shares climbed $2.02, or 19.5 percent, to $12.37, in NYSE trading, the biggest gain since the company went public in February 2005.
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jpmiller@tribune.com
