Illinois Tool Works Inc. (NYSE: ITW) manufactures precision engineering components and industrial systems for the automotive industry and the international construction industry. Its Board of Directors recently announced two new executive VPs, Juan Valls for automotive fasteners, and Robert Brunner for international construction. Such personnel moves will allow the company to continue its strong earnings track record, particularly in its international markets. Despite weakness in the North American construction market, Illinois Tool Works posted strong revenue and net income increases, although a significant portion of those increases came from recent acquisitions, 37 companies this year alone, rather than organic growth. 3Q 2007 revenues increased 16% to $4 billion, net income grew 10% to $696 million, and diluted EPS grew 14% to 89 cents. The story is the same for YTD figures.
Illinois Tool Works operates in two business units: North American market and international market. Each unit is subdivided into automotive and construction products and specialty engineered products. All segments within both units, with the exception of the North American construction segment ,which posted a 5% decline, posted increased revenues and operating incomes. International unit revenues increased 26-32%, with no indication of any market slowdown. Based on these numbers, CEO David Speer forecasts 4Q diluted EPS to be the same as 3Q, with FY 2007 diluted EPS in the $3.36-$3.40 range. The company continues to repurchase its own shares, $959 million YTD, and pay out its regular quarterly dividend of 28 cents per share. At its recent price of $56.95, Illinois Tool Works is an affordable way to stabilize an investor's portfolio.
Mergers I'd like to see -- Mattel (MAT) and Waste Management (WMI)
Entrepreneur's Journal: Bootstrap it like Google
Comfort Zone Investing: Can the market go higher? Definitely maybe
