Illinois Tool Works experienced its biggest decline in nearly seven years on Monday after the company lowered its profit forecast for the year, citing a sharp rise in the U.S. dollar.
The company trimmed its earnings-per-share guidance for 2018 to a range of $7.50 to $7.70 per share from $7.60 to $7.80 per share. Illinois Tool's guidance also missed a FactSet estimate of $7.75 per share.
Shares of Illinois Tool, which makes automotive and construction tools, dropped 7.2 percent, their worst day since Aug. 8, 2011, when they fell 7.4 percent.
Illinois Tool said it lowered its full-year profit guidance because it expects the dollar to shave off 12 cents from its second-half earnings per share.
The dollar has risen sharply recently as trade tensions between the U.S. and some of the largest world economies have increased. The U.S. dollar index is up 5 percent over the past six months. The greenback has also gotten a boost from tighter monetary policy by the Federal Reserve.
The company also reported third-quarter earnings per share that were in line with analysts' estimates of $1.97 per share. Illinois Tool's revenue, however, came in at $3.831 billion versus the $3.842 billion that was expected.