DOW JONES NEWSWIRES
Illinois Tool Works Inc.'s (ITW) second-quarter profit plunged
67% as demand dropped at the diversified manufacturer.
The company also gave a cautious third-quarter sales view as it
projected earnings from continuing operations of 39 cent to 51
cents a share and revenue ranging from down 2% to up 4% from the
second quarter's $3.39 billion. Analysts expected a profit of 45
cents a share and revenue of $3.53 billion, which is 4% higher than
the prior quarter's sales.
The bellwether maker of products ranging from fasteners to
foodservice and welding equipment has been at the front lines of
the sputtering economy's toll on the industrial sector as customers
sharply reduce orders.
Chairman and Chief Executive David B. Speer has said the
recovery in the U.S. economy would be uneven and prolonged, with
significant improvement in the housing industry not likely until
2011.
The company reported earnings of $176.6 million, or 35 cents a
share, down from $528.1 million, or $1.01 a share, a year earlier.
Earnings from continuing operations fell to 36 cents a share from
$1.01 a share. Last month, Illinois Tool boosted its forecast by 4
cents to 29 cents to 41 cents a share, citing its decision to not
sell its decorative-surfaces segment.
Revenue slid 26% to $3.39 billion. Analysts surveyed by Thomson
Reuters projected $3.36 billion.
Gross margin fell to 33.7% from 35.4%.
Among Illinois Tool Works' weakest segments were power systems
and electronics, where sales slid 39%.
The company, which traditionally has had a profitable
food-equipment business, also has been hurt as recession-battered
restaurants look for ways to conserve cash and avoid big equipment
investments. Food equipment sales fell 16%.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com;