Ingersoll-Rand and Illinois Tool Works Under StockCall Scrutiny: Cautious
Outlook for 2013
LONDON, February 7, 2013
LONDON, February 7, 2013 /PRNewswire/ --
Following a year of uncertainty, 2013 has begun on a solid note for the global
economy. Data out from U.S. has pointed to ongoing economic recovery. Economic
growth in China is starting to accelerate. Eurozone is also stabilizing.
Despite these improvements, diversified machinery companies such as
Ingersoll-Rand Plc (NYSE: IR) and Illinois Tool Works Inc. (NYSE: ITW) have
been cautious in their outlook for 2013. StockCall free technical reports on
Ingersoll-Rand and Illinois Tool Works can be accessed by registering at
Improving Economic Data in U.S. and China
Recent economic data from the world's two biggest economies, U.S. and China,
has been very encouraging. While data such as industrial production and
construction spending in the U.S. points to continuing recovery,
better-than-expected fourth quarter GDP in China suggests that the economic
activity in the country is picking up again. These are positive developments
for Ingersoll-Rand and Illinois Tool Works. Sign up for the free technical
analysis on Illinois Tool Works at http://www.StockCall.com/ITW020713.pdf
In addition, the Eurozone has also stabilized, with the worst of the debt
crisis now behind it. In Japan, the Bank of Japan (BOJ) has implemented
aggressive monetary easing measures to boost economic growth.
Certainly, the outlook for 2013 has significantly improved.
But Diversified Machinery Companies are Cautious
Although improving fundamentals of the global economy should benefit
diversified machinery companies, Ingersoll-Rand and Illinois Tool Works
recently gave cautious outlook for 2013.
Last week, Ingersoll-Rand said that it expects moderate growth in industrial
markets in 2013.The company also expects moderate growth in global parts and
service, and across most of its businesses in Asia and Latin America. Register
now for the complete technical research on Ingersoll-Rand at
Ingersoll-Rand said that refrigerated transport markets and commercial HVAC
replacement activity are likely to show slow year-over-year growth,
particularly in Europe where performance has been impacted by low economic
growth in important markets.
Ingersoll-Rand's sentiment was echoed by Illinois Tool Works last week. The
company said that 2013 will be characterized by modest growth for North
American and international geographies. For 2013, Illinois Tool Works expects
total organic revenue growth to be between 1% and 3%. The company forecast
2013 diluted income per share from continuing operations to be between $4.13
Ingersoll-Rand, meanwhile, expects full-year 2013 revenue to be between $14.2
billion and $14.6 billion and full-year adjusted earnings per share from
continuing operations to be between $3.45 and $3.65.
Solid Results Despite Challenging Environment
Despite the challenging macro environment, both Ingersoll-Rand and Illinois
Tool Works delivered solid results in the fourth quarter of 2012.
For the fourth quarter of 2012, Ingersoll-Rand posted net earnings of $235.6
million, or $0.78 per share.
Michael W. Lamach, Ingersoll-Rand's Chairman and CEO noted in 2012, the
company improved the strength of its business operations, delivering increased
operating margins, and a 23% improvement in adjusted earnings per share
despite a challenging economic backdrop in number of its key end markets.
Meanwhile, Illinois Tool Works reported fourth quarter income per share from
continuing operations of $2.10. E. Scott Santi, President and CEO of Illinois
Tool Works, noted that in 2012, the company grew its adjusted earnings per
share 10% and improved operating margins by 50 basis points.
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