Illinois Tool Works Inc. (NYSE:ITW) stock fell 0.70% (As on February 2, 11:20:31 AM UTC-4, Source: Google Finance) after the company posted mixed result for the fourth quarter of FY 23. At the end of the fourth quarter, Illinois Tool had cash and equivalents of $1.1 billion compared with $708 million at the end of December 2022. Long-term debt was $6.3 billion compared with $6.2 billion at the end of December 2022. In 2023, Illinois Tool generated net cash of $3.5 billion from operating activities, reflecting a surge of 50.7% from the year-ago reported number. Capital spending on the purchase of plant and equipment was $455 million, up 10.4% year over year. Free cash flow of $3.1 billion surged 59.3% year over year.
Moreover, Test & Measurement and Electronics’ revenues were down 0.3% year over year to $731 million. Our estimate for segmental revenues was $728.7 million. Revenues from Automotive Original Equipment Manufacturer increased 9.4% to $814 million. Food Equipment generated revenues of $655 million, increasing 3.9% year over year. Welding revenues were $451 million, down 6.3% year over year. Construction Products’ revenues were down 2.3% to $459 million. Revenues of $437 million from Specialty Products reflected a decrease of 5.4%. Polymers & Fluids’ revenues of $440 million declined 3.2% year over year.
ITW in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.42, beating the analysts’ estimates for the adjusted earnings per share of $2.40, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 0.3 percent to $3.98 billion in the fourth quarter of FY 23, missing the analysts’ estimates for revenue of $4.01 billion. However, organic sales decreased 0.5% and divestitures reduced revenues by 0.4%. The operating margin was 24.8% in the quarter, in line with the year-ago quarter. Enterprise initiatives contributed 150 bps to the operating margin.
Illinois Tool expects earnings to be in the range of $10.00-$10.40 per share for 2024. Organic revenues are expected to increase 1-3% in 2024. The company anticipates total revenues to increase 2-4% from the year-ago reported figure. Operating margin is expected to be 25.5-26.5% for the year. Enterprise initiatives are expected to contribute more than 100 basis points to the operating margin.
Illinois Tool projects free cash flow to be more than 100% of net income in 2023. The company expects to repurchase about $1.5 billion worth of shares in the year.