Illinois Tool Works Inc. (ITW) is poised to gain from positive momentum in the Automotive Original Equipment Manufacturer (OEM) segment, driven by the electric vehicles market and higher content in the Chinese OEM market. The company is also benefiting from strength in the Specialty Products segment. The segment is being driven by strong momentum in the ground support equipment, specialty films and consumer packaging businesses and increasing demand in the appliance business. Growth in the institutional end ...

Illinois Tool Works (NYSE: ITW ) is a multinational corporation that specializes in industrial technology as well as manufacturing. The company operates through many segments, including: Food Equipment, Automotive OEM, Welding, Test & Measurement and Electronics, Construction Products, Polymers and Fluids and Specialty Products. The company was founded more thanI have a masters degree in Analytics from Northwestern University and a bachelors degree in Accounting. I have worked in the investment arena for ov ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number: 1-4797 ILLINOIS TOOL WORKS INC. (Exact name of registrant as specified in its charter) | --- | ...

Core Viewpoint - Illinois Tool Works Inc. (ITW) reported third-quarter 2024 adjusted earnings of $2.65 per share, exceeding the Zacks Consensus Estimate of $2.53, with a year-over-year increase of 4% [1]. Financial Performance - Revenues for ITW were $3.97 billion, falling short of the consensus estimate of $4.01 billion, representing a 1.6% decline year over year due to a 1.4% decrease in organic sales [2]. - The revenue from the Test & Measurement and Electronics segment decreased by 0.2% year over year to $697 million, slightly above the estimate of $696.5 million [3]. - Automotive Original Equipment Manufacturer revenues dropped 3.3% year over year to $772 million, below the estimate of $813.8 million [3]. - Food Equipment revenues were $677 million, down 0.2% year over year, also missing the estimate of $700.2 million [4]. - Welding revenues decreased by 1.3% year over year to $462 million, slightly above the estimate of $452.9 million [4]. - Construction Products revenues fell 8.1% year over year to $479 million, below the estimate of $510.1 million [5]. - Specialty Products revenues increased by 5.7% year over year to $438 million, exceeding the estimate of $417.5 million [5]. - Polymers & Fluids revenues declined by 1.9% year over year to $448 million, below the estimate of $463.6 million [5]. Margin Profile - ITW's cost of sales decreased by 3.8% year over year to $2.23 billion, while selling, administrative, and research and development expenses increased by 7% year over year to $658 million [6]. - The operating margin remained stable at 26.5%, with enterprise initiatives contributing 130 basis points to the operating margin [6]. Balance Sheet and Cash Flow - At the end of the third quarter, ITW had cash and equivalents of $947 million, down from $1.1 billion at the end of December 2023, and long-term debt increased to $6.6 billion from $6.3 billion [7]. - In the first nine months of 2024, ITW generated net cash of $2.2 billion from operating activities, reflecting a decline of 13.3% year over year [8]. - Capital spending on plant and equipment was $319 million, down 1.5% year over year, and free cash flow decreased by 15.1% year over year to $1.85 billion [8]. 2024 Guidance - ITW expects earnings to be in the range of $11.63-$11.73 per share, an increase from the earlier guidance of $10.30-$10.40 [9]. - Total revenues and organic revenues are anticipated to be flat, with an expected operating margin between 26.5% and 27% [9]. - Enterprise initiatives are projected to contribute more than 100 basis points to the operating margin [9]. - The company plans to repurchase approximately $1.5 billion worth of shares and expects free cash flow to be about 100% of net income [10].

Third Quarter 2024 Earnings Conference Call October 30, 2024 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 global supply chain challenges, expected impact of inflation including raw material inflation and rising interest rates, the impact of enterprise initiatives, future financial ...

For the quarter ended September 2024, Illinois Tool Works (ITW) reported revenue of $3.97 billion, down 1.6% over the same period last year. EPS came in at $2.65, compared to $2.55 in the year-ago quarter. The reported revenue represents a surprise of -1.30% over the Zacks Consensus Estimate of $4.02 billion. With the consensus EPS estimate being $2.53, the EPS surprise was +4.74%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to de ...

Illinois Tool Works (ITW) came out with quarterly earnings of $2.65 per share, beating the Zacks Consensus Estimate of $2.53 per share. This compares to earnings of $2.55 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.74%. A quarter ago, it was expected that this equipment manufacturer for the transportation, power, food and construction industries would post earnings of $2.45 per share when it actually produced earnings o ...

Revenue and Growth - Revenue of $4.0 billion, a decrease of 2% as organic growth declined 1%[1] - Total revenue for the nine months ended September 30, 2024, was $11,966 million, with an operating income of $3,233 million and an operating margin of 27.0%[14] Operating Performance and Margins - Operating margin of 26.5% with enterprise initiatives contributing 130 basis points[1] - Operating income was $1.05 billion, with six of seven segments expanding operating margin[4] - Operating margin is projected to be in the range of 26.5 to 27%, an improvement of 165 basis points at the midpoint[7] - Automotive OEM segment revenue for the nine months ended September 30, 2024, was $2,403 million, with an operating income of $469 million and an operating margin of 19.5%[14] - Food Equipment segment revenue for the nine months ended September 30, 2024, was $1,975 million, with an operating income of $537 million and an operating margin of 27.2%[14] - Test & Measurement and Electronics segment revenue for the nine months ended September 30, 2024, was $2,071 million, with an operating income of $501 million and an operating margin of 24.2%[14] - Welding segment revenue for the nine months ended September 30, 2024, was $1,404 million, with an operating income of $458 million and an operating margin of 32.6%[14] - Polymers & Fluids segment revenue for the nine months ended September 30, 2024, was $1,334 million, with an operating income of $364 million and an operating margin of 27.3%[14] - Construction Products segment revenue for the nine months ended September 30, 2024, was $1,471 million, with an operating income of $436 million and an operating margin of 29.6%[14] - Specialty Products segment revenue for the nine months ended September 30, 2024, was $1,327 million, with an operating income of $410 million and an operating margin of 30.9%[14] Earnings Per Share (EPS) and Net Income - GAAP EPS of $3.91 included a divestiture gain of $1.26; ex-gain EPS of $2.65, an increase of 4%[1] - Full year GAAP EPS guidance raised by $1.33 to a range of $11.63 to $11.73 per share[1] - Net income for the nine months ended September 30, 2024, was $2,738 million, compared to $2,240 million for the same period in 2023[17] - Net income for the twelve months ended December 31, 2023, was $2,957 million, with an after-tax return on average invested capital of 30.4%[24] - Adjusted net income per share diluted for the three months ended September 30, 2024, was $2.65, after adjusting for the impact of the sale of noncontrolling interest in Wilsonart[27] Cash Flow and Capital Management - Operating cash flow was $891 million, and free cash flow was $783 million, with a conversion rate to adjusted net income of 102%[5] - The company repurchased $375 million of its own shares and raised its dividend by 7% to an annualized $6.00 per share[5] - Free cash flow for the nine months ended September 30, 2023, was $2,176 million, with a free cash flow to net income conversion rate of 97%[26] - Net cash provided by operating activities for the nine months ended September 30, 2023, was $2,500 million, with a net cash to net income conversion rate of 112%[26] - Free cash flow for the three months ended September 30, 2024, was $783 million, with a free cash flow to net income conversion rate of 68% excluding certain discrete items[26] Divestitures and Tax Impact - Proceeds from the Wilsonart divestiture were $395 million, resulting in a pre-tax gain of $363 million and a favorable GAAP EPS impact of $1.26[6] - The effective tax rate for the third quarter was 14.9%[5] - Reported income taxes for the nine months ended September 30, 2023, were $656 million with a tax rate of 22.7%, adjusted to $676 million and 23.4% after including a discrete tax benefit of $20 million[23] - Effective tax rate for the year ended December 31, 2023, excluding the discrete tax benefit, was 23.2%[25] Return on Invested Capital - After-tax return on average invested capital for the nine months ended September 30, 2024, was 31.3%, compared to 30.5% for the same period in 2023[17] - Net income to average invested capital for the twelve months ended December 31, 2023, was 29.0%[24] - Average invested capital for the twelve months ended December 31, 2023, was $10,214 million[24] - Total invested capital as of December 31, 2023, was $10,112 million, including cash and equivalents of $1,065 million and debt of $8,164 million[24]

Core Insights - Illinois Tool Works Inc. (ITW) reported third quarter 2024 revenue of $4.0 billion, a decrease of 2% year-over-year, with organic growth declining by 1% [1][3] - The operating margin was 26.5%, with enterprise initiatives contributing 130 basis points [1][5] - GAAP EPS increased to $3.91, including a divestiture gain of $1.26; excluding this gain, EPS was $2.65, reflecting a 4% increase [1][4] - The company raised its full-year GAAP EPS guidance by $1.33 to a range of $11.63 to $11.73 per share [1][8] Financial Performance - Revenue for the third quarter was $4.0 billion, down 1.6% due to a 1.4% decline in organic growth, with foreign currency translation impacting revenue by 0.4% and acquisitions contributing 0.2% [3] - Operating income was $1.05 billion, with an operating margin of 26.5%, unchanged from the prior year; six of seven segments expanded their operating margins [5] - Operating cash flow was $891 million, and free cash flow was $783 million, with a conversion rate to adjusted net income of 102% [6] Divestiture Impact - The company completed the sale of its noncontrolling equity interest in Wilsonart, generating proceeds of $395 million and a pre-tax gain of $363 million, which positively impacted GAAP EPS by $1.26 [7][8] - The divestiture is not expected to materially affect the company's financial results in future quarters [7] Guidance and Future Outlook - ITW is maintaining its guidance for flat revenue and organic growth for 2024, with an operating margin projected between 26.5% and 27% [8] - The company plans to repurchase approximately $1.5 billion of its own shares and has raised its dividend by 7% to an annualized $6.00 per share [6][8] Segment Performance - In the third quarter, the Automotive OEM segment reported revenue of $772 million with an operating margin of 19.4%, while Food Equipment generated $677 million with a margin of 28.4% [19] - Specialty Products segment saw a revenue increase of 6.0%, while Construction Products experienced a decline of 8.8% [21]

Core Insights - Illinois Tool Works (ITW) is expected to report quarterly earnings of $2.52 per share, a decline of 1.2% year-over-year, with revenues forecasted at $4.02 billion, reflecting a decrease of 0.3% compared to the same period last year [1] - The consensus EPS estimate has been revised down by 1.3% in the past 30 days, indicating a reassessment by analysts [1] Revenue Estimates - Analysts estimate 'Operating Revenues- Test & Measurement and Electronics' at $697.72 million, unchanged year-over-year [2] - 'Operating Revenues- Construction Products' is forecasted to be $517.96 million, a decrease of 0.8% year-over-year [2] - 'Operating Revenues- Food Equipment' is expected to reach $698.97 million, an increase of 3.1% from the previous year [2] - 'Operating Revenues- Specialty Products' is projected at $419.73 million, reflecting a growth of 1.4% year-over-year [3] - 'Operating Revenues- Automotive OEM' is estimated at $794.52 million, a decline of 0.6% from the year-ago quarter [3] - 'Operating Revenues- Welding' is expected to be $461.71 million, down 1.3% year-over-year [3] - 'Operating Revenues- Polymers & Fluids' is projected to reach $462.52 million, indicating a year-over-year increase of 1% [3] Organic Growth Estimates - 'Operating Revenue - Food Equipment - Organic growth' is expected to be 3.3%, down from 6.3% in the previous year [4] - 'Operating Revenue - Polymers & Fluids - Organic growth' is forecasted at 1.6%, compared to 3.4% last year [4] - 'Operating Income- Automotive OEM' is projected at $151.41 million, slightly up from $151 million year-over-year [4] - 'Operating Income- Food Equipment' is expected to reach $192.12 million, compared to $185 million in the same quarter last year [4] Stock Performance - Shares of Illinois Tool Works have decreased by 2.5% over the past month, contrasting with a 1.4% increase in the Zacks S&P 500 composite [4] - ITW holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the overall market [5]