The pair have consistently hiked their shareholder payouts for longer than many investors have been alive. Every earnings season leaves behind a set of dividend raises, and this one we're now moving past was no exception. Among this season's lifters were two companies that have been hiking their payouts so long and so frequently, they're among the market's very rare Dividend Kings. In other words, they've done the dividend raise dance at least once annually for a minimum of 50 years in a row. That isn't a s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q | Delaware | | 36-1258310 | | --- | --- | --- | | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) | | 155 Harlem Avenue IL | Glenview | 60025 | | (Address of principal executive offices) | | (Zip Code) | (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPOR ...

Core Insights - Illinois Tool Works (ITW) reported strong second-quarter results for fiscal 2025, with GAAP earnings per share of $2.58, surpassing analyst expectations of $2.56, and revenue of $4.1 billion, exceeding the consensus of $4.02 billion [1][2] - The company achieved record operating margin of 26.3%, the highest for any second quarter in its history, driven by enterprise cost initiatives [1][5] - Despite the strong profitability, organic growth was flat, and free cash flow declined compared to Q2 2024, indicating areas for attention [1][9] Financial Performance - GAAP EPS for Q2 2025 was $2.58, a 1.6% increase from Q2 2024's $2.54 [2] - Revenue for Q2 2025 was $4.1 billion, a 1.7% increase from $4.03 billion in Q2 2024 [2] - Operating margin reached 26.3%, up 0.1 percentage points from 26.2% in Q2 2024 [2] - Free cash flow fell to $449 million, down 21.4% from $571 million in Q2 2024 [2][9] - Net income was $755 million, a slight decrease of 0.5% from $759 million in Q2 2024 [2] Segment Performance - Automotive OEM parts grew organically by 2.4%, driven by demand in China's electric vehicle market [5][6] - Food Equipment reported slight positive organic growth, particularly in institutional channels [5] - Welding equipment sales rose 2.8% organically, while the Test & Measurement and Electronics segment declined 0.7% [6] - The Polymers & Fluids segment shrank 3.7% organically, and the Construction Products group saw a 6.9% drop in organic revenue [6] Strategic Focus - The company emphasizes operational excellence, customer-centric innovation, and active portfolio management, divesting non-core businesses to sharpen strategic focus [4] - ITW's "80/20 Front-to-Back" approach targets the most profitable customers and products while continuously improving operations [3] - Management reported progress on the Customer-Back Innovation program, streamlining operations and exiting less differentiated offerings [8] Future Guidance - For fiscal 2025, management raised full-year GAAP EPS guidance to $10.35–$10.55, up from $10.15–$10.55 [10] - Total revenue growth is expected to be 1–3%, with organic growth projected to be flat to 2% [10] - Operating margin is projected between 26–27%, supported by ongoing cost initiatives [10] - Free cash flow conversion is targeted to exceed 100% of net income, with a focus on disciplined capital returns [11]

Title: Illinois Tool Works Inc. (NYSE:ITW) Q2 2025 Earnings Call July 30, 2025 10:00 AM ET Company Participants Christopher A. O'Herlihy - President, CEO & Director Erin Linnihan - Vice President of Investor Relations Michael M. Larsen - Senior VP & CFO Conference Call Participants Good morning. My name is Janine, and I will be your conference operator for today. At this time, I would like to welcome everyone to the ITW's Second Quarter Earnings Conference Call. [Operator Instructions] Erin Linnihan, Vice P ...

Illinois Tool Works Inc. (ITW) reported second-quarter 2025 adjusted earnings of $2.58 per share, which surpassed the Zacks Consensus Estimate of $2.56. Earnings increased 1.6% year over year. Illinois Tool's revenues of $4.05 billion beat the consensus estimate of $4.01 billion. The top line increased 1% year over year, driven by a favorable foreign currency translation of 1%. Organic sales were flat in the quarter. ITW's Segmental Performance Test & Measurement and Electronics' revenues were up 1.2% year ...

Financial Data and Key Metrics Changes - Total revenue increased by 1%, with foreign currency translation contributing 1% while product line simplification (PLS) accounted for a 1% reduction [5][7] - GAAP EPS reached $2.58, operating income was $1.1 billion, and operating margin was 26.3%, all setting second quarter records [5][9] - Free cash flow generated was $449 million, representing a 59% conversion rate, with expectations to reach over 100% for the full year [9] Business Line Data and Key Metrics Changes - Automotive OEM revenue increased by 4%, with 2% organic growth, while strategic PLS reduced revenue by over 1% [10] - Food Equipment revenue rose by 2%, with 1% organic growth, driven by a 5% increase in North America [12] - Welding segment delivered 3% organic growth, with equipment sales increasing by 4% [15] - Polymers and Fluids revenue declined by 3%, with organic revenue down 5% in Polymers [16] - Construction Products revenue declined by 6%, but operating margin improved by 140 basis points to 30.8% [17] Market Data and Key Metrics Changes - North America experienced a 2% organic revenue decline, while Europe was down 3%, and Asia Pacific saw a 9% increase, with China growing by 15% [7][8] - Overall relevant markets are expected to decline in the low single digits in 2025, an improvement from previous projections [11] Company Strategy and Development Direction - The company is focused on customer back innovation to drive above-market organic growth, aiming for a 3% yield by 2030 [6] - The strategy includes executing enterprise initiatives to enhance operating margins and offset tariff costs [8][20] - The company raised its full-year guidance, projecting total revenue growth of 1% to 3% and organic growth of 0% to 2% [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertain environment and delivering differentiated performance through 2025 and beyond [6][21] - The company noted encouraging signs in end markets such as semiconductors and electronics, while consumer-oriented markets remain challenging [8][40] - Management highlighted the importance of enterprise initiatives and pricing actions in maintaining profitability [20][21] Other Important Information - The company expects all seven segments to grow revenue and improve margins in the second half of the year [20] - The guidance reflects a cautious approach due to the uncertain macro environment, with a focus on maintaining strong free cash flows [53] Q&A Session Summary Question: Inquiry about operating margin outlook - Management explained that while pricing actions to offset tariffs have been successful, they have been slightly margin dilutive, impacting the updated margin guidance [25][26] Question: Follow-up on the automotive segment - Management indicated that automotive margins are expected to remain solidly above 20% for the second half of the year, supported by enterprise initiatives [27][28] Question: Success outside of automotive for CBI - Management noted strong progress across all segments, particularly in welding, and confirmed that the CVI contribution is on track to meet targets [34][35] Question: FX implications in guidance - Management stated that current foreign exchange rates are expected to provide modest favorability, improving from earlier projections of a significant headwind [32] Question: Capital allocation and M&A strategy - Management emphasized a disciplined approach to M&A, focusing on high-quality acquisitions that align with long-term growth potential [82][83] Question: Restructuring and PLS impact - Management confirmed that restructuring spending is on track and that PLS continues to be a headwind to organic growth, but beneficial for future positioning [91][94]

Financial Data and Key Metrics Changes - Total revenue increased by 1%, with foreign currency translation contributing 1% and product line simplification (PLS) accounting for a 1% reduction [4][6] - GAAP EPS reached $2.58, operating income was $1.1 billion, and operating margin was 26.3%, all setting second quarter records [4][5] - Free cash flow generated was $449 million, representing a 59% conversion rate, slightly below historical averages but on track for over 100% conversion for the full year [9] Business Line Data and Key Metrics Changes - Automotive OEM revenue increased by 4%, with 2% organic growth, while North America declined by 7% and Europe grew by 1%, with China showing a remarkable 22% growth [10][12] - Food Equipment revenue rose by 2%, with North America growing 5% driven by equipment and service growth, while international sales declined by 5% [12][13] - Welding segment delivered 3% organic growth, with equipment sales up 4% and consumables growing 1% [15] - Polymers and Fluids revenue declined by 3%, with organic revenue down 5% in Polymers and 3% in Fluids [16] - Construction Products revenue decreased by 6%, with North America down 7% and Europe down 5%, but operating margin improved by 140 basis points to 30.8% [17] Market Data and Key Metrics Changes - North America experienced a 2% organic revenue decline, while Europe was down 3%, contrasting with a 9% increase in Asia Pacific, particularly a 15% increase in China [6][7] - The overall market outlook for 2025 is expected to be down in the low single digits, an improvement from previous projections [11] Company Strategy and Development Direction - The company is focused on customer back innovation to achieve above-market organic growth, with a goal of a 3% yield by 2030 [5] - The company raised its full-year guidance, indicating confidence in navigating the current environment and delivering differentiated performance [5][20] - All seven segments are projected to grow revenue and improve margins in the second half of the year [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform in uncertain environments, citing strong execution on controllable factors [5][22] - The company anticipates solid second-half financial performance with reasonable organic growth and substantial margin improvement [22] - Management noted that while price actions have been successful, they have been modestly dilutive to margins [25][26] Other Important Information - The company expects to maintain a disciplined approach to M&A, focusing on high-quality acquisitions that align with its growth strategy [81][82] - Restructuring expenses for the year are expected to be flat year-over-year, with $20 million spent in the first half and another $20 million planned for the second half [90][91] Q&A Session Summary Question: Inquiry about operating margin outlook - Management clarified that price actions to offset tariffs have been successful but slightly dilutive to margins, leading to updated margin guidance [25][26] Question: Follow-up on automotive segment margins - Management expressed satisfaction with the automotive segment's progress, expecting margins to remain solidly above 20% for the second half [28][29] Question: Success of customer back innovation (CBI) outside automotive - Management highlighted strong performance in welding and equipment segments, with CBI contributing positively to growth [35][36] Question: Foreign exchange impact on guidance - Management indicated that current foreign exchange rates are expected to provide modest favorability, improving from earlier projections of a significant headwind [33] Question: Capital allocation strategy and M&A pipeline - Management reiterated confidence in organic growth potential and a disciplined approach to M&A, focusing on high-quality opportunities [81][82] Question: Restructuring and PLS impact - Management confirmed that PLS remains a headwind to organic growth but is beneficial for future positioning [95] Question: Expectations for organic growth in the second half - Management stated that guidance is based on current demand levels, with no further acceleration factored in [114]

Core Insights - Illinois Tool Works (ITW) reported revenue of $4.05 billion for the quarter ended June 2025, reflecting a year-over-year increase of 0.7% and an EPS of $2.58, up from $2.54 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate by 1.08%, while the EPS also surpassed the consensus estimate by 0.78% [1] Financial Performance - Operating Revenue - Total ITW showed organic growth of -0.4%, slightly better than the average estimate of -0.5% [4] - Operating Revenue - Automotive OEM achieved organic growth of 2.4%, compared to an estimated decline of -2.5% [4] - Operating Revenue - Food Equipment reported organic growth of 0.8%, exceeding the estimate of 0.5% [4] - Operating Revenue - Specialty Products had organic growth of 0.3%, surpassing the average estimate of -0.4% [4] Segment Performance - Operating Revenues for Automotive OEM reached $845 million, exceeding the average estimate of $790.6 million, with a year-over-year change of +3.7% [4] - Operating Revenues for Food Equipment were $680 million, compared to the average estimate of $666.24 million, reflecting a +2% year-over-year change [4] - Operating Revenues for Test & Measurement and Electronics stood at $686 million, above the average estimate of $672.53 million, with a +1.2% year-over-year change [4] - Operating Revenues for Polymers & Fluids were $438 million, slightly below the average estimate of $447.66 million, showing a -3.5% year-over-year change [4] - Operating Revenues for Construction Products were $473 million, compared to the average estimate of $492.87 million, indicating a -6.2% year-over-year change [4] - Operating Revenues for Specialty Products reached $455 million, exceeding the average estimate of $445.56 million, with a +1.3% year-over-year change [4] - Operating Revenues for Welding were $479 million, surpassing the average estimate of $467.18 million, reflecting a +2.8% year-over-year change [4] Stock Performance - Shares of Illinois Tool Works have returned +1.7% over the past month, while the Zacks S&P 500 composite has changed by +3.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Illinois Tool Works (ITW) came out with quarterly earnings of $2.58 per share, beating the Zacks Consensus Estimate of $2.56 per share. This compares to earnings of $2.54 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +0.78%. A quarter ago, it was expected that this equipment manufacturer for the transportation, power, food and construction industries would post earnings of $2.34 per share when it actually produced earnings o ...

Forward-Looking Statements Safe Harbor Statement This presentation and related conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the potential impact of tariffs, the Company's projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and tot ...