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Illinois Tool (ITW) to Post Q1 Earnings: Is a Beat in Store?
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Illinois Tool Works Inc. (ITW - Free Report) is scheduled to release first-quarter 2022 results on May 3, before market open.
The company delivered better-than-expected results thrice in the last four quarters, the earnings surprise being 3.67%, on average. In the last reported quarter, the company’s earnings of $1.95 surpassed the Zacks Consensus Estimate of $1.89 by 3.17%.
Image Source: Zacks Investment Research
In the past three months, shares of Illinois Tool have lost 13.3% compared with the industry’s decline of 11.8%.
Key Factors & Estimates for Q1
Illinois Tool is expected to have benefited from its exposure in diversified end markets, solid product offerings, healthy liquidity position and enterprise strategy. Notably, an operating margin expansion of 110 basis points (bps) driven by enterprise strategy was recorded in the fourth quarter of 2021.
The buyouts were accretive to the company’s sales in the fourth quarter. This trend is likely to have continued in the to-be-reported quarter as well, given strength across Illinois Tool’s acquired assets of MTS Systems’ test and simulation business. The acquired assets are part of the company’s Test & Measurement and Electronics segment.
On the macro front, industrial companies like Illinois Tool might have benefited from better operating activities in the country, as evident from an 8.1% year-over-year increase in industrial production in the first quarter.
Despite improving end markets, supply-chain disruptions, especially those related to the availability of components in Automotive OEM, and inflation in raw material costs are likely to have hampered first-quarter performance. Pricing actions are likely to have been a relief.
The Zacks Consensus Estimate for Illinois Tool’s revenues is pegged at $3,767 million for the first quarter of 2022, suggesting a 6.3% increase from the year-ago quarter’s reported number and a 2.4% improvement from the previous quarter’s reported figure. Earnings estimates are pegged at $2.07, indicating a decrease of 1.9% from the year-ago reported figure but a 6.2% increase sequentially.
On a segmental basis, the Zacks Consensus Estimate for the Automotive OEM’s revenues is pegged at $698 million, indicating a 5.3% increase from the previous quarter's figure. The consensus estimate for Food Equipment’s revenues is pegged at $519 million, suggesting a decline of 8.7% from the previous quarter. The Construction Products’ revenues estimate is pegged at $492 million, indicating a 2.5% increase sequentially.
The Zacks Consensus Estimate for Polymers & Fluids’ first-quarter revenues is $455 million, suggesting a sequential increase of 1.8%. Specialty Products’ consensus estimate for revenues is pegged at $474 million, implying a rise of 1.5% from the previous quarter. The consensus estimate for revenues of Test & Measurement and Electronics is pegged at $694 million, suggesting growth of 9.1% on a sequential basis. Welding’s revenue estimate of $434 million suggests an improvement of 2.8% from the previous quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Illinois Tool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Illinois Tool has an Earnings ESP of +0.62% as the Most Accurate Estimate is pegged at $2.08, higher than the Zacks Consensus Estimate of $2.07.
Zacks Rank: Illinois Tool currently carries a Zacks Rank #3.
Other Key Picks
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to deliver an earnings beat this season:
Chart Industries, Inc. (GTLS - Free Report) has an Earnings ESP of +9.16% and a Zacks Rank of 3 at present. GTLS delivered a trailing four-quarter earnings surprise of 2.9%, on average.
Earnings estimates of Chart Industries have decreased 2.3% for 2022 in the past 60 days. Its shares have gained 27.5% in the past three months.
Eaton Corporation plc (ETN - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 3, currently. ETN delivered a trailing four-quarter earnings surprise of 7%, on average.
Earnings estimates of Eaton have decreased 0.8% for 2022 in the past 60 days. Its shares have declined 6.7% in the past three months.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank of 3, currently. Its earnings surprise in the last four quarters was 56.7%, on average.
In the past 60 days, AGCO’s earnings estimates have decreased 0.7% for 2022. The stock has rallied 8.7% in the past three months.
Image: Bigstock
Illinois Tool (ITW) to Post Q1 Earnings: Is a Beat in Store?
Illinois Tool Works Inc. (ITW - Free Report) is scheduled to release first-quarter 2022 results on May 3, before market open.
The company delivered better-than-expected results thrice in the last four quarters, the earnings surprise being 3.67%, on average. In the last reported quarter, the company’s earnings of $1.95 surpassed the Zacks Consensus Estimate of $1.89 by 3.17%.
Image Source: Zacks Investment Research
In the past three months, shares of Illinois Tool have lost 13.3% compared with the industry’s decline of 11.8%.
Key Factors & Estimates for Q1
Illinois Tool is expected to have benefited from its exposure in diversified end markets, solid product offerings, healthy liquidity position and enterprise strategy. Notably, an operating margin expansion of 110 basis points (bps) driven by enterprise strategy was recorded in the fourth quarter of 2021.
The buyouts were accretive to the company’s sales in the fourth quarter. This trend is likely to have continued in the to-be-reported quarter as well, given strength across Illinois Tool’s acquired assets of MTS Systems’ test and simulation business. The acquired assets are part of the company’s Test & Measurement and Electronics segment.
On the macro front, industrial companies like Illinois Tool might have benefited from better operating activities in the country, as evident from an 8.1% year-over-year increase in industrial production in the first quarter.
Despite improving end markets, supply-chain disruptions, especially those related to the availability of components in Automotive OEM, and inflation in raw material costs are likely to have hampered first-quarter performance. Pricing actions are likely to have been a relief.
The Zacks Consensus Estimate for Illinois Tool’s revenues is pegged at $3,767 million for the first quarter of 2022, suggesting a 6.3% increase from the year-ago quarter’s reported number and a 2.4% improvement from the previous quarter’s reported figure. Earnings estimates are pegged at $2.07, indicating a decrease of 1.9% from the year-ago reported figure but a 6.2% increase sequentially.
On a segmental basis, the Zacks Consensus Estimate for the Automotive OEM’s revenues is pegged at $698 million, indicating a 5.3% increase from the previous quarter's figure. The consensus estimate for Food Equipment’s revenues is pegged at $519 million, suggesting a decline of 8.7% from the previous quarter. The Construction Products’ revenues estimate is pegged at $492 million, indicating a 2.5% increase sequentially.
The Zacks Consensus Estimate for Polymers & Fluids’ first-quarter revenues is $455 million, suggesting a sequential increase of 1.8%. Specialty Products’ consensus estimate for revenues is pegged at $474 million, implying a rise of 1.5% from the previous quarter. The consensus estimate for revenues of Test & Measurement and Electronics is pegged at $694 million, suggesting growth of 9.1% on a sequential basis. Welding’s revenue estimate of $434 million suggests an improvement of 2.8% from the previous quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Illinois Tool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Illinois Tool has an Earnings ESP of +0.62% as the Most Accurate Estimate is pegged at $2.08, higher than the Zacks Consensus Estimate of $2.07.
Illinois Tool Works Inc. Price and EPS Surprise
Illinois Tool Works Inc. price-eps-surprise | Illinois Tool Works Inc. Quote
Zacks Rank: Illinois Tool currently carries a Zacks Rank #3.
Other Key Picks
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to deliver an earnings beat this season:
Chart Industries, Inc. (GTLS - Free Report) has an Earnings ESP of +9.16% and a Zacks Rank of 3 at present. GTLS delivered a trailing four-quarter earnings surprise of 2.9%, on average.
Earnings estimates of Chart Industries have decreased 2.3% for 2022 in the past 60 days. Its shares have gained 27.5% in the past three months.
Eaton Corporation plc (ETN - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 3, currently. ETN delivered a trailing four-quarter earnings surprise of 7%, on average.
Earnings estimates of Eaton have decreased 0.8% for 2022 in the past 60 days. Its shares have declined 6.7% in the past three months.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank of 3, currently. Its earnings surprise in the last four quarters was 56.7%, on average.
In the past 60 days, AGCO’s earnings estimates have decreased 0.7% for 2022. The stock has rallied 8.7% in the past three months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.