The effective tax rate for the third quarter of 2017 was 15.6% compared with 16.7%. The third quarter of 2017 reflected net discrete income tax benefits of $9.9 million compared with net discrete income tax benefits of $6.6 million. The 2017 third quarter net discrete tax benefit includes $7.4 million in income tax benefit as a result of the remeasurement of uncertain tax positions due to expiration of statute of limitations and a $2.3 million income tax benefit related to share-based accounting. The net discrete tax benefit in 2016 of $6.6 million included a $4.0 million income tax benefit related to share-based accounting. Excluding the net discrete income tax benefits in both periods, the effective tax rates would have been 27.7% for the third quarter of 2017 and 27.2% for the third quarter of 2016.
Other
Stock option expense was $3.2 million for the third quarter of 2017, compared with $2.5 million. Pension income was $0.7 million for the third quarter of 2017, compared with pension income of $0.5 million for the third quarter of 2016. Interest expense, net of interest income, was $8.2 million for the third quarter of 2017 compared with $5.6 million and reflected the impact of higher debt levels, primarily due to the acquisition of e2v. Corporate expense increased to $13.2 million for the third quarter of 2017, compared with $11.1 million and reflected higher compensation accruals. Other income and expense was expense of $3.0 million for the third quarter of 2017 compared with expense of $0.8 million, and reflected higher foreign currency expense.
Outlook
Based on its current outlook, the company’s management believes that fourth quarter 2017 GAAP earnings per diluted share will be in the range of $1.70 to $1.75 and full year 2017 GAAP earnings per diluted share will be in the range of $6.10 to $6.15. The company’s management believes that full year 2017 adjusted earnings per diluted share will be in the range of $6.66 to $6.71, compared to the prior outlook of $6.15 to $6.25. The company’s effective tax rate for 2017 is expected to be 27.7%, before discrete items.
|
Fourth Quarter Outlook |
Full Year Outlook | ||||||||||||
| 2017 | 2017 | ||||||||||||
| Adjusted fully diluted earnings per share outlook (a): | |||||||||||||
| Fully diluted earnings per share outlook | $1.70 - $1.75 | $6.10 - $6.15 | |||||||||||
| e2v transaction costs, including stamp duty, advisory, legal and other consulting fees and other costs |
— |
0.26 | |||||||||||
| e2v inventory fair value step-up amortization expense | — | 0.14 | |||||||||||
| e2v funds-certain bank bridge facility commitment expense | — | 0.05 | |||||||||||
| Foreign currency option contract expense to hedge the e2v purchase price | — | 0.11 | |||||||||||
| Adjusted fully diluted earnings per share outlook | $1.70 - $1.75 | $6.66 - $6.71 | |||||||||||
| (a) | The adjustments to the full year outlook are net of taxes of $0.22 per diluted share, based on a 27.7% income tax rate. | ||
