GLENVIEW, IL -- Illinois Tool Works today reported fourth-quarter revenue at its Test & Measurement and Electronics unit rose 9% year-over-year to $545 million.
Operating margin was up 330 basis points to 23.4% for the Test & Measurement and Electronics unit, which includes such companies as MPM, Kester Solder and Vitronics Soltec.
For the year, the unit recorded revenue of $2.07 billion and an operating margin of 22.4%, vs. $1.97 billion in revenue and an operating margin of 18.9% a year ago.
Overall fourth-quarter revenue grew 7% to $3.6 billion as organic revenue increased 4% and foreign currency translation increased revenue by 3%. GAAP EPS of $(0.22) includes a one-time $658 million charge associated with the passage of the “Tax Cuts and Jobs Act.” The charge encompasses several elements, including a repatriation tax on accumulated overseas earnings and a benefit from the revaluation of deferred tax assets and liabilities. Operating margin was 23.4%, an increase of 160 basis points, with enterprise initiatives contributing 140 basis points of margin improvement.
Organic revenue growth was positive in six of seven segments.
In a press statement, Scott Santi, chairman and chief executive of ITW, said, In 2017, excluding one-time tax and legal items, we grew EPS 16%, improved operating margin by 120 basis points to an all-time high of 23.7% and increased after-tax return on invested capital 230 basis points to a record 24.4%. “We also continued to make meaningful progress on our focused efforts to accelerate organic growth. Our 2017 organic growth rate of 3% was up almost 2 percentage points versus 2016. In addition, our fourth quarter organic growth rate of 4% gives us good momentum going into 2018.”
Full-year 2017 revenue increased 5% to $14.3 billion with organic growth of 3%. GAAP EPS of $4.86 includes the above-mentioned unfavorable tax impact and a $0.17 benefit from a previously disclosed favorable legal item. Excluding these one-time items, EPS was $6.59, an increase of 16% year-on-year. Operating margin was 24.4% and includes a 70 basis point benefit from the legal item. Excluding this item, operating margin was 23.7%, an increase of 120 basis points.
The company forecasts first quarter organic growth of 3 to 4%.