ITW reports record 21.3 pct operating margin in 2Q

Illinois Tool Work reported second quarter 2015 diluted earnings per share of $1.30, up 7 percent from the same period last year, and growth in key segments led to a record 21.3 percent operating margin.

The manufacturer said Organic revenue growth was up slightly on continued strong growth in the automotive OEM and food equipment segments, along with improving demand in construction products. The company added that growth was offset by the impact of the soft capital spending in its welding and test and measurement and electronics segments.

ITW's recent implementation of its product line simplification initiative reduced revenue growth by 1 percentage point in the quarter.

"ITW continues to execute very well in the face of an external operating environment that remains challenging on a number of levels. In the second quarter, the company delivered solid EPS growth with record operating margin of 21.3 percent and after-tax return on invested capital above 20 percent," said E. Scott Santi, chairman and chief executive officer.

"Consistent with our strategy and despite the challenging near-term macro environment, we continue to focus on and invest in executing the steps necessary to position the company to deliver solid above-market organic growth," he added. "As we transition into the back-half of our current five-year Enterprise Strategy, we remain firmly on track to achieve our 2017 and beyond organic growth target of 200 basis points or more above global GDP."