ITW to expand stock buyback

Illinois Tool Works, the maker of Duo-Fast nail guns and Wilsonart countertops, approved a new $3 billion share repurchase program.

The authorization represents about 55 million shares based on Monday's closing price for the stock, Illinois Tool said Tuesday in a statement. The company raised its buyback forecast for the year to $1.1 billion to $1.4 billion worth of shares, up from a prior range of $700 million to $900 million.

Illinois Tool has spent $680 million this year to repurchase stock under an August 2006 authorization to buy 35 million shares. The Glenview-based company has repurchased about 23 million shares under that program. The company had 561.2 million shares outstanding as of June 30.

The company's free cash flow, which is cash available to pay debt, acquire companies, buy shares or pay dividends, jumped 28 percent to $780 million in the first half of this year from $608 million a year earlier. The gain helped the company boost its share repurchase and announce on Aug. 3 a 33 percent increase in its quarterly dividend to 28 cents, while keeping a target of $1.2 billion for acquisitions this year.

At the end of June, Illinois Tool reported total debt of $1.48 billion.

Illinois Tool rose 29 cents to $54.89 in New York Stock Exchange composite trading. The stock has climbed 19 percent since the beginning of the year.