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Tickers in this Article: ITW, CBE, GE, MTW
Illinois Tool Works Inc. (ITW) is slated to release its third quarter 2012 results on Tuesday, October 23. The current Zacks Consensus Estimate for earnings per share (EPS) is $1.06, representing an annualized growth of 5.9%.    

Illinois Tool did well in the last four trailing quarters as far as its performance is concerned in relation to the Zacks Consensus Estimate, measured in terms of earnings surprise. Although not by a wide margin, the company outdid the Zacks Consensus Estimate in all four trailing quarters, with an average earnings surprise of 1.8%.

Second Quarter Recap

Illinois Tool Works reported upbeat second quarter 2012 financial results on July 24. Earnings per share from continuing operations came in at $1.11, up 16% year over year and above the Zacks Consensus Estimate of $1.09. Operating revenue increased marginally by 0.9% to $4,655 million, but failed to surpass the Zacks Consensus Estimate of $4,861 million. The meager improvement in revenue was far behind management's projected growth range of 3.5%-6.0%.

For further details follow the link: ITW Beats, Revises Outlook Down

Agreement/Magnitude of Estimate Revisions    

In the last 30 days, of the total 15 estimates, one was raised while another was lowered for the third quarter 2012. Despite revisions, lack of magnitude kept the estimate stable at $1.06 for the quarter.

For 2012, two of the total 17 estimates were lowered, resulting in the fall of a cent in the Zacks Consensus Estimate to $4.11 in the last 30 days. Similar trend was noticed for 2013, as 3 of the total 17 estimates were lowered, leading to a 3 cent fall in the estimate to $4.48.

Our Take    

Results in the third quarter 2012 are expected to be lower on a sequential basis; compared with the Zacks Consensus Estimate, it is expected to fall behind by 0.94%. Management expects earnings for third quarter to be within the $1.03-$1.11 range based on total revenue growth assumption of (1%)-1%.

Most of the negative revisions in estimates take into account sluggish demand, higher negative currency translation impact and $100 million of restructuring charges. Management also revised down its revenue growth estimate from the 5%-7% range earlier to the 1%-3% range for 2012. Similarly, earnings per share guidance range were lowered from $4.14-$4.38 to $4.03-$4.19 per share range.

Illinois Tool Works is one of the leading manufacturers of industrial products and equipment.  The company faces stiff competitions from its peers including Cooper Industries plc (CBE), General Electric Co. (GE), and Manitowoc Co. Inc. (MTW).
 

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