In the midst of Q2 earnings season, Illinois Tool Works (NYSE:ITW) prepares to release its second-quarter 2017 report on July 24. Illinois Tool Works manufactures and markets a variety of products and systems that provide specific, problem-solving solutions for a diverse customer base worldwide.
Illinois Tool Works possesses a Zacks Rank #2 (Buy), and it has beaten its earnings projections in each of its past fourteen operational quarters dating back to 2014. Due to the company’s impressive Zacks Rank and Earnings ESP of 1.84%, Illinois Tool Works appears to be on the cusp of surpassing its earnings estimates once again.
If that’s not sufficient, check out these three additional reasons to view the security with optimism as we approach its earnings report date:
1. Development via acquisitions
Illinois Tool Works remains committed toward making acquisitions for the development of its core segments, as well as the creation of new platforms for expanding long-term growth. Recently, the company acquired the Engineered Fasteners and Components business from ZF TRW, which has expanded the company’s product offerings under its automotive segment.
In the first quarter of 2017, acquisitions added 3.8% to total revenue growth and also helped the company achieve higher operating margins, better capital efficiency, and solid return on invested capital.
2. Superb growth prospects
Illinois Tool Works excels in several growth categories because the company features strong metrics that influence expansion. For instance, the stock sports an RoE of 46.48% and net margin of 15.24%, both of which demolish the industry averages of 11.15% and 4.55%, respectively.
Additionally, Illinois Tool Works is projected to real in $3.62 billion in revenue, which would signify year-over-year growth of 5.37%. Also, the company is expected earn $1.63 per share, which would represent growth of 11.80%. These measures are especially solid considering the company’s massive size, as it’s always encouraging to see the existing giants deliver consistent growth.
3. Growth in key segments
Illinois Tool Works is projected to report year-over-year increases in several key segments of its business model. For example, the company’s Automotive sector reported sales of $670 million for Q2 2016. However, according to our exclusive consensus estimates for Q2 2017, Illinois Tools Works’ Automotive business is expected to earn $811.3 million, which would mark an impressive 21.1% year-over-year growth in unit revenue.
Further, Illinois Tool Works reported revenues of $484 million for its Specialty Products unit in the prior-year quarter. The company is projected to earn $498.5 million for Q2 2017, which would represent almost a 3% year-over-year growth in revenue.
These important stock drivers are from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>
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Illinois Tool Works Inc. (ITW): Free Stock Analysis Report
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