ITW Posts Flat Q2 Sales, Hits Record Operating Profit

ITW's welding segment seeing an 11 percent organic sales decline from a year ago, but growth in its other six segments was enough to produce another solid sales and profit year for the company.

Id 19816 It Wa
Id 19811 Itw

Glenview, IL fasteners and components manufacturer Illinois Tool Works reported its 2016 second quarter fiscals on Thursday, led by flat total sales year-over-year and a quarterly record for operating profit and operating margin.

ITW posted Q2 sales of $3.4 billion, down 0.1 percent year-over-year, while organic sales grew 1.2 percent. Organic sales grew 0.4 percent in North America and grew 2.2 percent Internationally.

Total profit of $525 million increased 9.4 percent from a year earlier, while operating profit hit a company record $792 million, up 8 percent. Operating margin increased 180 base points from a year ago to a company record 23.1 percent.

Six of ITW's seven business segments posted organic sales growth:

  • Food Equipment grew 5 percent
  • Automotive OEM grew 4 percent
  • Test & Measurement/Electronics grew 3 percent
  • Construction Products grew 3 percent
  • Polymers & Fluids grew 2 percent 
  • Specialty Products grew 0.3 percent
  • Welding declined by 11 percent

ITW chairman and CEO E. Scott Santi said that along with achieving best-ever opeating income, operating margin and return on invested capital performance, "I am also pleased with the progress that our segments are making in executing our framework for accelerated organic revenue growth, as evidenced by the fact that six of our seven segments delivered positive year on year organic growth in the quarter. As a result, we were able to overcome the continued challenging demand environment in our Welding segment and deliver 12 percent earnings per share growth."

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