Illinois Tool Works (NYSE:ITW) to use the famous investment euphemism “as previously announced” reported they sold off some assets and therefore restated earnings and EPS. OK fair enough. The press release begs more questions than it solves.
ITW, who BTW does not quote any executives, could have confirmed how much capital was being redeployed and what was ITW going to do. Silence usually means embarrassment. Debts are over $2 Billion and interest rates will start popping soon. Why not cut debt and get the monkey off your back? Or at least get a smaller monkey. Don’t give me this locked in fixed rate stuff. Companies with little or no debt are more valuable. $2 billion is a lot and will remain a lot.
The EPS hit seems substantial for the quarters restated but they cover that up with re-affirmed guidance to pacify the gullible and easily distracted. They then follow-up proudly with how many shares they have re-purchased and what the supposed positive impact will be.
The stock yields about 2.5% and the company offers nothing about fundamentals. What about a dividend increase?
This is drip drip disclosure designed to allow executives in the future to say “as we previously announced”
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
- $ITW Grandiose Expectations Can It Get Better? Can It Get Worse? (financialskeptic.wordpress.com)
- CORRECTED – UPDATE 1-Illinois Tool EPS misses by 1 cent (reuters.com)
- ITW and self publishing – its own books and others (mjroseblog.typepad.com)