DOW JONES NEWSWIRES
Illinois Tool Works Inc.'S (ITW) fourth-quarter net income
tumbled 50% on slumping sales and the stronger dollar, in a fresh
sign of the toll the slumping economy is taking on the industrial
sector.
The bellwether toolmaker again slashed its 2009 outlook and gave
a first-quarter outlook below Wall Street's estimates, and its
shares were off 4.9% at $33.20 in recent premarket trading.
The company expects broad-based weakness to continue in its end
markets this year.
Net income was $233.8 million, or 46 cents a share, down from
$470.7 million, or 87 cents a share, a year earlier.
Revenue fell 5.9% to 3.68 billion, with the unfavorable
currency-exchange rate contributing 4.5 percentage points to the
decline.
Earnings from continuing operations were boosted by a lower tax
rate to 54 cents a share - beating the company's forecast, slashed
in early December, of 44 cents to 52 cents a share on a revenue
drop of 7% to 9%.
Operating margin fell to 34.4% from 35.6%, reflecting higher
than expected restructuring costs and acquisition-related costs and
declining end markets.
Sales in the power systems and electronics segment fell
9.6%.
Like other manufacturers and industrial conglomerates, Illinois
Tool has been hard hit as customers sharply reduce orders. In
mid-December, it said end-market revenue could fall by 5% to 10%
next year.
For 2009, Illinois Tool again lowered its outlook for earnings
from continuing operations to $1.84 to $2.48 a share, on an
expected revenue drop of 6% to 12%. In December, it slashed its
earnings forecast for the second time in two months to a range of
$2.94 to $3.02 a share.
For the first quarter, it sees earnings from continuing
operations of 26 cents to 42 cents a share. Analysts were expecting
47 cents.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.