Glenview-basedIllinois Tool Works reported first quarter 2014 revenues grew four percent primarily o the strength of the company's international businesses.
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Total revenues for the quarter were $3.6 billion and operating income increased 16 percent to $667 million. Organic revenues increased 3.3 percent, with international growing 6.3 percent and North America increasing 1.0 percent. Internationally, European and Asia Pacific organic revenues grew 4.8 percent and 7.2 percent, respectively, the company reported.
Diluted earnings per share from continuing operations were $1.01, 15 percent higher than the prior year period. The stronger-than-expected EPS was driven by meaningful contributions from ongoing enterprise initiatives and accelerated share repurchase, the company said.
The company's Automotive OEM segment saw revenue growth of 13 percent, which it said significantly outpaced worldwide auto builds of 5 percent. Revenues grew 11 percent in North America, 14 percent in Europe and 28 percent in China. Operating margins of 23.3 percent increased 350 basis points.
The Food Equipment segment's revenues grew 5 percent due to solid growth in equipment and service in North America and strong equipment sales internationally. Operating margins of 18.6 percent increased 190 basis points.
ITW's Construction Products segment's revenues grew 5 percent due to 14 percent growth in Asia Pacific and 1 percent growth in Europe. In the United States, organic revenues grew 7 percent in the residential category, while the renovation category was flat and the commercial construction category declined 8 percent. Operating margins of 14.8 percent increased 310 basis points.
"Underlying our strong first quarter financial results is our ongoing five-year enterprise strategy and related initiatives," said Scott Santi, president and chief executive officer. "Thanks to the worldwide ITW team, we produced operating margins of nearly 19 percent.
"We continued to focus on capital allocation during the quarter by returning significant amounts of free cash to our investors in the form of accelerated share repurchase and consistent dividend payout," Santi added.