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Dec 31, 2019
ITW Q4 2019 Earnings Report
ITW reported strong execution and resilient financial performance despite near-term macro challenges.
Key Takeaways
ITW's Q4 2019 GAAP EPS increased by 9% to $1.99, including $0.11 of divestiture gains. The company's revenue declined by 3.1%, with organic revenue down 1.6%. Despite these challenges, ITW's operating margin was 23.7%, and free cash flow conversion rate was 114%.
GAAP EPS increased 9% to $1.99, including $0.11 of divestiture gains.
Total revenue declined 3.1%; organic revenue was down 1.6%.
Operating margin was 23.7%, or 24.1% excluding higher restructuring expenses.
Free cash flow was 114% of net income.
ITW
ITW
ITW Revenue by Segment
Revenue by Segment
Automotive OEM Revenue
CapyFin.comFood Equipment Revenue
CapyFin.comTest & Measurement and Electronics Revenue
CapyFin.comWelding Revenue
CapyFin.comPolymers & Fluids Revenue
CapyFin.comConstruction Products Revenue
CapyFin.comSpecialty Products Revenue
CapyFin.com Forward Guidance
The company initiated full-year EPS guidance in a range of $7.65 to $8.05 per share.
Positive Outlook
- Organic growth is forecast to be in the range of zero to two percent.
- PLS impact is forecast to moderate to approximately 50 basis points.
- Operating margin is expected to improve and be in a range of 24.5 to 25 percent, with enterprise initiatives contributing approximately 100 basis points.
- Free cash flow is expected to be greater than 100 percent of net income.
- The Company expects an effective tax rate in the range of 23.5 to 24.5 percent and plans to repurchase approximately $2 billion of its shares in 2020.
Challenges Ahead
- Foreign currency translation and divestitures are projected to reduce revenues by one percentage point each.
Revenue & Expenses
Visualization of income flow from segment revenue to net income