Illinois Tool Works (ITW-2.6%) opens sharply lower even after beating expectations of Q2 earnings and revenues, and raising full-year guidance.
Q2 net income jumped to $775M from $319M in the year-ago period, while operating revenues surged 43% Y/Y to $3.68B.
For the full year, Illinois Tool now sees EPS of $8.55-$8.95 after previously guiding for $8.20-$8.60/share, while also expecting organic growth of 11%-13%, compared with its prior outlook of 10%-12%.
The company raised guidance after saying order intake rates in all segments and regions remains strong.
But according to Bloomberg, Jefferies analyst Stephen Volkmann is pointing out margin problems in the automotive division, where margins of 18.8% were ~400 bps below expectations.