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The Zacks Consensus Estimate for ITW’s third-quarter earnings has been revised 0.4% downward in the past 60 days. Illinois Tool delivered better-than-expected results thrice in the last four quarters, missing the mark once, the earnings surprise being 2.8%, on average.
Let’s see how things are shaping up for Illinois Tool this earnings season.
Key Factors and Estimates for Q3
Illinois Tool’s enterprise strategy, including portfolio management and business structure simplification, is expected to have aided its top-line performance in the third quarter. Our Estimates for ITW’s third-quarter net sales is pegged at $3900.6 million, indicating a 9.7% rise from the year-ago quarter’s reported number.
ITW’s acquisition of MTS Systems Corporation’s test and simulation business (December 2021) augmented its Test & Measurement and Electronics segment, and also boosted its product offerings and technical abilities by expanding its footprint in various end markets. This buyout is expected to have contributed to Illinois Tools’ top-line growth.
However, weakness in ITW’s Specialty products segment due to supply-chain disruptions is likely to have dented ITW’s third-quarter margins and profitability. We expect Illinois Tool’s gross margin to deteriorate to 40.7% in the third quarter of 2022 from 41.1% reported in the year-ago period. Also, the rising costs of sales, and selling, general and administrative expenses might have affected ITW’s bottom line in the to-be-reported quarter.
We expect selling, general and administrative expenses to have increased 6.7% from the year-ago period’s level in the third quarter of 2022. Given its substantial international presence, foreign-currency headwinds are expected to have affected its top line.
The Zacks Consensus Estimate for Illinois Tool’s revenues is pegged at $3,935 million for the third quarter, suggesting a 10.7% increase from the year-ago quarter’s reported number. Earnings estimates are pegged at $2.25, indicating an increase of 11.4% from the year-ago period’s reported figure.
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.
Earnings ESP: Illinois Tool has an Earnings ESP of +0.38% as the Most Accurate Estimate of $2.26 is above the Zacks Consensus Estimate of $2.25.
Zacks Rank: Illinois Tool currently carries a Zacks Rank #3.
Highlights of Q2 Earnings
Illinois Tool’s earnings surpassed estimates by 7.2%, while sales beat the same by 1%. Adjusted earnings (excluding a 15-cent impact of unfavorable foreign currency translation) in the quarter were $2.37, surpassing the Zacks Consensus Estimate of $2.21. Earnings increased 12.9% from the year-ago figure of $2.10. ITW generated revenues of $4,011 million in the reported quarter, reflecting growth of 9% from the year-ago figure.
Other Stocks to Consider
Here are some other companies worth considering, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Sonoco Products Company (SON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3 at present. SON is slated to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 4.1%.
Emerson Electric Co. (EMR - Free Report) currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. EMR is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.
Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6%.
Image: Bigstock
Illinois Tool (ITW) to Post Q3 Earnings: What's in Store?
Illinois Tool Works Inc. (ITW - Free Report) is scheduled to release third-quarter 2022 results on Oct 25, before market open.
The Zacks Consensus Estimate for ITW’s third-quarter earnings has been revised 0.4% downward in the past 60 days. Illinois Tool delivered better-than-expected results thrice in the last four quarters, missing the mark once, the earnings surprise being 2.8%, on average.
Let’s see how things are shaping up for Illinois Tool this earnings season.
Key Factors and Estimates for Q3
Illinois Tool’s enterprise strategy, including portfolio management and business structure simplification, is expected to have aided its top-line performance in the third quarter. Our Estimates for ITW’s third-quarter net sales is pegged at $3900.6 million, indicating a 9.7% rise from the year-ago quarter’s reported number.
ITW’s acquisition of MTS Systems Corporation’s test and simulation business (December 2021) augmented its Test & Measurement and Electronics segment, and also boosted its product offerings and technical abilities by expanding its footprint in various end markets. This buyout is expected to have contributed to Illinois Tools’ top-line growth.
However, weakness in ITW’s Specialty products segment due to supply-chain disruptions is likely to have dented ITW’s third-quarter margins and profitability. We expect Illinois Tool’s gross margin to deteriorate to 40.7% in the third quarter of 2022 from 41.1% reported in the year-ago period. Also, the rising costs of sales, and selling, general and administrative expenses might have affected ITW’s bottom line in the to-be-reported quarter.
We expect selling, general and administrative expenses to have increased 6.7% from the year-ago period’s level in the third quarter of 2022. Given its substantial international presence, foreign-currency headwinds are expected to have affected its top line.
The Zacks Consensus Estimate for Illinois Tool’s revenues is pegged at $3,935 million for the third quarter, suggesting a 10.7% increase from the year-ago quarter’s reported number. Earnings estimates are pegged at $2.25, indicating an increase of 11.4% from the year-ago period’s reported figure.
Illinois Tool Works Inc. Price and EPS Surprise
Illinois Tool Works Inc. price-eps-surprise | Illinois Tool Works Inc. Quote
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 +0.38% as the Most Accurate Estimate of $2.26 is above the Zacks Consensus Estimate of $2.25.
Zacks Rank: Illinois Tool currently carries a Zacks Rank #3.
Highlights of Q2 Earnings
Illinois Tool’s earnings surpassed estimates by 7.2%, while sales beat the same by 1%. Adjusted earnings (excluding a 15-cent impact of unfavorable foreign currency translation) in the quarter were $2.37, surpassing the Zacks Consensus Estimate of $2.21. Earnings increased 12.9% from the year-ago figure of $2.10. ITW generated revenues of $4,011 million in the reported quarter, reflecting growth of 9% from the year-ago figure.
Other Stocks to Consider
Here are some other companies worth considering, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Sonoco Products Company (SON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3 at present. SON is slated to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 4.1%.
Emerson Electric Co. (EMR - Free Report) currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. EMR is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.
Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.