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ITW(ITW) - 2024 Q3 - Quarterly Results
ITWITW(ITW)2024-10-30 13:27

Revenue and Growth - Revenue of 4.0billion,adecreaseof24.0 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 3,233millionandanoperatingmarginof27.03,233 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 2,403million,withanoperatingincomeof2,403 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 1,975million,withanoperatingincomeof1,975 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 2,071million,withanoperatingincomeof2,071 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 1,404million,withanoperatingincomeof1,404 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 1,334million,withanoperatingincomeof1,334 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 1,471million,withanoperatingincomeof1,471 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 1,327million,withanoperatingincomeof1,327 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 3.91includedadivestituregainof3.91 included a divestiture gain of 1.26; ex-gain EPS of 2.65,anincreaseof42.65, an increase of 4%[1] - Full year GAAP EPS guidance raised by 1.33 to a range of 11.63to11.63 to 11.73 per share[1] - Net income for the nine months ended September 30, 2024, was 2,738million,comparedto2,738 million, compared to 2,240 million for the same period in 2023[17] - Net income for the twelve months ended December 31, 2023, was 2,957million,withanafter−taxreturnonaverageinvestedcapitalof30.42,957 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 891million,andfreecashflowwas891 million, and free cash flow was 783 million, with a conversion rate to adjusted net income of 102%[5] - The company repurchased 375millionofitsownsharesandraiseditsdividendby7375 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 2,176million,withafreecashflowtonetincomeconversionrateof972,176 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 783million,withafreecashflowtonetincomeconversionrateof68783 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 363millionandafavorableGAAPEPSimpactof363 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 656millionwithataxrateof22.7656 million with a tax rate of 22.7%, adjusted to 676 million and 23.4% after including a discrete tax benefit of 20million[23]−EffectivetaxratefortheyearendedDecember31,2023,excludingthediscretetaxbenefit,was23.220 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 10,112million,includingcashandequivalentsof10,112 million, including cash and equivalents of 1,065 million and debt of $8,164 million[24]