What's in the Offing for Illinois Tool (ITW) in Q4 Earnings?
Illinois Tool Works Inc. ITW is scheduled to release fourth-quarter results on Feb 01, before market open.
The Zacks Consensus Estimate for Illinois Tool’s fourth-quarter earnings increased 0.4% in the past 60 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in three of the preceding four quarters, while missing in one. The average beat was 0.6%.
The Zacks Consensus Estimate for the company’s fourth-quarter 2023 revenues is pegged at $4,009 million, suggesting growth of 1% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at $2.39 per share, indicating 2.1% growth from the year-ago quarter’s reported number.
Let’s see how things have shaped up for Illinois Tool this earnings season.
Factors to Note
Favorable customer mix and product line simplification activities are likely to have boosted the performance of Illinois Tool’s Automotive Original Equipment Manufacturer (OEM) segment in the fourth quarter. We expect the Automotive OEM segment’s revenues to be $758.4 million, suggesting a 1.8% increase from the year-ago reported number.
Growth in the institutional, food retail and restaurant end markets is likely to have supported the Food Equipment segment in the fourth quarter. We expect the segment’s revenues to increase 5.1% from the year-ago reported number to $663.0 million.
However, weakness in the company’s semiconductor-related business in North America is expected to have hurt the performance of the Test & Measurement and Electronics segment. We expect revenues from ITW’s segment to inch down 0.4% year over year to $728.7 million in the fourth quarter.
Declines in the consumer packaging, specialty films and strength films businesses are likely to have weighed on ITW’s Specialty Products segment in the to-be-reported quarter. Due to this adversity, in the fourth quarter, we expect the segment’s revenues to decline 3.4% year over year to $446.2 million.
Also, the Construction Products segment is expected to put up a weak show in the fourth quarter due to softness in the residential end market and the U.S. commercial end market. We expect revenues from the segment to decrease 2.7% year over year to $457.5 million in the fourth quarter.
Nevertheless, the company’s cost management actions and enterprise initiatives are likely to have positively impacted its fourth-quarter performance. We expect the company’s total revenues to increase 0.6% from the year-ago reported figure to $3,995.5 million. Our estimate for the company’s earnings is pegged at $2.38 per share, thus indicating a 1.7% rise from the year-ago reported figure.
Illinois Tool Works Inc. Price and Consensus
Illinois Tool Works Inc. price-consensus-chart | Illinois Tool Works Inc. Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for ITW 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 not the case here, as elaborated below.
Earnings ESP: ITW has an Earnings ESP of -1.02% as the Most Accurate Estimate is pegged at $2.36, which is lower than the Zacks Consensus Estimate of $2.39. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: ITW presently carries a Zacks Rank of 3.
Highlights of Q3 Earnings
Illinois Tool reported third-quarter 2023 adjusted earnings of $2.55 per share, which surpassed the Zacks Consensus Estimate of adjusted earnings of $2.44 per share. Earnings increased 8.5% year over year. Illinois Tool’s revenues of $4,031 million missed the consensus estimate of $4,079 million. The top line inched up 0.5% year over year due to a 0.2% increase in organic sales.
Stocks to Consider
Here are some companies within the broader Industrial Products sector that, according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Alarm.com Holdings, Inc. ALRM has an Earnings ESP of + 8.79% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release fourth-quarter 2023 results on Feb 22. Alarm.com’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 35%.
Ingersoll Rand Inc. IR has an Earnings ESP of +0.98% and a Zacks Rank of 3. The company is slated to release fourth-quarter 2023 results on Feb 15.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 16.1%.
RBC Bearings Incorporated RBC has an Earnings ESP of +8.19% and a Zacks Rank of 3. The company is slated to release third-quarter fiscal 2024 (ended December 2023) results on Feb 8.
RBC Bearings’ earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 7.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report
RBC Bearings Incorporated (RBC) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
Alarm.com Holdings, Inc. (ALRM) : Free Stock Analysis Report
