The catering equipment division of ITW, parent company of global brands such as Hobart and Foster Refrigerator, is toasting an improvement in operating profit after a solid start to the year.
Q1 numbers published yesterday reveal that ITW’s foodservice equipment business achieved operating income of $125m (£98m) versus $122m (£95m) at the same stage last year.
Revenues hit $497m (£389m) for the three months to the end of March, which the company said represented 2% organic growth, but it was down on the $499m (£390m) it stated last year.
Operating margin for the division came in at a favourable 25.1% versus 24.5% the year before.
Overall it was a fantastic quarter for the group, as it reported that company-wide sales increased 6% (and 3.5% organically) to $3.5 billion (£2.7 billion) on the way to achieving an all-time record operating margin of 23.3%. Foreign currency translation reduced revenue by 1.3%.
“Our record results in the first quarter reflect strong execution across the company and further progress in our efforts to leverage ITW’s highly differentiated and proprietary business model to drive solid growth with best-in-class margins and returns,” stated chairman and CEO Scott Santi.
“We are off to a strong start in 2017 and the company is well-positioned to deliver continued progress and differentiated performance through the balance of 2017 and beyond.”
As a result of the company’s Q1 results, ITW is raising its 2017 full-year guidance. It now expects earnings to be in the range of $6.20 to $6.40 (£4.84 to £5.00) per share, up from prior guidance of $6.00 to $6.20 (4.69 to £4.84) per share, with organic growth of 2% to 4%, up from 1.5 to 3.5%.
ITW also anticipates operating margin to exceed 23.5% and free cash flow to exceed 100% of net income.