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Earnings Outlook For Illinois Tool Works

Benzinga Insights
·2 min read

On Friday, October 23, Illinois Tool Works (NYSE: ITW) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Analysts predict Illinois Tool Works will report earnings of $1.46 per share on revenue of $2.97 billion. Illinois Tool Works reported a per-share profit of $2.04 when it published results during the same quarter last year. Sales in that period totaled $3.48 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

View more earnings on ITW

The analyst consensus estimate would represent a 28.43% decline in the company's EPS figure. Revenue would have fallen 14.63% from the same quarter last year. Here is how the Illinois Tool Works's reported EPS has stacked up against analyst estimates in the past:

Quarter

Q2 2020

Q1 2020

Q4 2020

Q3 2019

EPS Estimate

0.70

1.71

1.85

1.94

EPS Actual

1.01

1.77

1.88

2.04

Revenue Estimate

2.33 B

3.29 B

3.46 B

3.54 B

Revenue Actual

2.56 B

3.23 B

3.47 B

3.48 B

Stock Performance

Shares of Illinois Tool Works were trading at $202.7 as of October 21. Over the last 52-week period, shares are up 18.12%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Illinois Tool Works is scheduled to hold the call at 10:00:00 ET and can be accessed here.

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