Excluding the gain from the removal of its decorative surfaces unit, ITW earned 89 cents per diluted share in Q4 2012.
Illinois Tool Works Inc., helped by a hefty gain from the sale of its decorative surfaces unit, said on Tuesday that fourth-quarter profits more than doubled.
In the latest quarter the Glenview-based manufacturer had net income of $979 million, or $2.11 per diluted share, a 121 percent increase from $442 million, or 91 cents per diluted share, in the year-ago period.
Excluding the gain from the unit sale, earnings were 89 cents per diluted share, slightly below Zack's Investment Research estimates of 93 cents.
ITW's sales fell 2.4 percent to $4.22 billion from $4.32 billion in last year’s quarter, a decline the company attributed to the impact of the decorative surfaces divestiture and unfavorable currency translation.
The decorative surfaces segment had been one of ITW’s key business units along with transportation, power systems and electronics, industrial packaging, polymers and fluids, food equipment, and construction segments. Even after that sale, the company remains vulnerable to swings in both the automotive and housing industries, two long-battered sectors that have recently been recovering.
The removal of the decorative surfaces unit falls in line with the company’s five-year business restructuring plan that CEO E. Scott Santi outlined in a presentation he gave in New York last month.
On Tuesday morning, Santi told investors in a conference call to expect earnings per share in the first-quarter between 91 cents and 99 cents, which is 3 to 11 cents lower than Zack's Investment Research estimates of $1.02.
ITW said Tuesday that it expects “modest growth” for 2013, estimating its total revenue growth between 3 and 5 percent.
“It was a very solid earnings release,” said Barrington Research analyst Walter Liptak. “Even though business is still slow it has cost-down improvements that will help to lift its profits in 2013.”
The earnings, combined with the downward guidance, didn’t go over well with investors, however: in New York Stock Exchange trading Tuesday, ITW shares slid $1.52, or 2.3 percent, to close at $63.92.
For the 2012 year, ITW had net income of $2.87 billion or $6.06 per diluted share, up from the prior year’s $2.07 billion, or $4.19 per diluted share. Full-year sales rose to $17.92 billion from $17.79 billion in the previous year.