July 20, 2010 / 12:25 PM / 9 years ago

CORRECTED - UPDATE 1-Illinois Tool EPS misses by 1 cent

(Corrects sales to billions from millions in fourth paragraph)

* Q2 EPS ex-items of $0.83 vs $0.84 estimate

* Company blames taxes for shortfall

* Q2 sales rose 20 percent to $ 4.08 billion

CHICAGO, July 20 (Reuters) - Illinois Tool Works Inc (ITW.N) reported improved quarterly results on Tuesday, driven by especially strong demand for automotive, industrial packaging and welding products.

But the results came in a penny per share shy of expectations, pulled down by a higher tax rate than the company had forecast.

The diversified manufacturer posted a second-quarter profit of $420.8 million, or 83 cents a share, up from $176.6 million, or 35 cents a share, a year before.

Sales at the company, which makes everything from industrial fasteners and adhesives to professional kitchen equipment, rose 20.1 percent to $4.08 billion.

But the results were slightly lower than the 84 cents a share analysts, on average, had expected the Glenview, Illinois company to report.

Illinois Tool blamed the shortfall on taxes, saying its second-quarter tax rate of 31.6 percent was 260 basis points higher than it had forecasted and cost it about 3 cents a share in lost earnings. (Reporting by James B. Kelleher, editing by Gerald E. McCormick)

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