ITW Trims Sales & Profit Forecasts On Home and Auto Slowdowns

Jason Sandefur

Weakness in the U.S. auto industry and home construction prompted Illinois Tool Works Inc. to lower its earnings and sales forecasts for the remainder of 2006.
ITW now expects sales to rise in a range of 3% to 4% in the third quarter, down from its previous forecast of 4% to 6%.
For the year, the Glenview, IL-based manufacturer sees sales growth in its base businesses in the range of 4.4% to 5.2%.
Analysts have expected sales of $3.55 billion for the third quarter and $14.11 billion for the year.
During the third quarter of 2005 ITW reported revenue of $3.25 billion, while annual sales for 2005 totaled $12.92 billion.
The revised forecasts did not seem to worry investors.
“It”s a well-managed company and it”s trading at valuations that we haven”t seen in 15, 16 years,” Thomas Leritz of Argent Capital Management told Reuters. “What we”re visualizing is a slower economy, but one that creates less inflation. In other words, a soft landing.”
The revisions were announced on a difficult day for U.S. manufacturing, with Ford Motor Co. pledging to cut one-third of its domestic workforce and targeting $6 billion in materials cost savings by 2010 through streamlined purchasing. \ �2006 FastenerNews.com