ITW(US:ITW) ZACKS·2025-04-30 17:05Core Insights - Illinois Tool Works Inc. (ITW) reported first-quarter 2025 adjusted earnings of $2.38 per share, exceeding the Zacks Consensus Estimate of $2.34, but reflecting a 2.5% year-over-year decline [1] - Revenues for the quarter were $3,839 million, slightly below the consensus estimate of $3,842 million, marking a 3.4% year-over-year decrease, primarily due to unfavorable foreign currency translation and a 1.6% decline in organic sales [1] Segment Performance - Test & Measurement and Electronics revenues decreased 6.3% year over year to $652 million, missing the estimate of $687.8 million [2] - Automotive Original Equipment Manufacturer revenues fell 3.7% year over year to $786 million, slightly above the estimate of $772.8 million [2] - Food Equipment revenues were $627 million, down 0.7% year over year, close to the estimate of $629.3 million [3] - Welding revenues decreased 0.9% year over year to $472 million, surpassing the estimate of $465.1 million [3] - Construction Products revenues declined 9.2% year over year to $443 million, below the estimate of $453.8 million [4] - Specialty Products revenues were $435 million, reflecting a 1% year-over-year decrease, also below the estimate of $445.6 million [4] - Polymers & Fluids revenues of $429 million declined 0.8% year over year, slightly above the estimate of $422 million [4] Margin Profile - Cost of sales increased 0.7% year over year to $2.16 billion, while selling, administrative, and research and development expenses rose 4.4% year over year to $706 million [5] - The operating margin was 24.8%, down 60 basis points from the previous year, with enterprise initiatives contributing 120 basis points to the margin [5] Balance Sheet and Cash Flow - At the end of Q1 2025, cash and equivalents stood at $873 million, down from $948 million at the end of December 2024 [6] - Long-term debt increased to $7.28 billion from $6.31 billion at the end of December 2024 [6] - Net cash generated from operating activities was $592 million, reflecting a 0.5% increase year over year [7] - Capital spending on plant and equipment was $96 million, up 1% year over year, with free cash flow at $496 million, a 0.4% year-over-year increase [7] 2025 Guidance - ITW reaffirmed its full-year 2025 financial guidance, expecting earnings in the range of $10.15-$10.55 per share [8] - Revenues and organic revenues are projected to increase by 0-2%, with an expected operating margin of 26.5–27.5% [8] - Enterprise initiatives are anticipated to contribute approximately 100 basis points to the operating margin [8] - The company projects free cash flow to exceed 100% of net income and plans to repurchase about $1.5 billion worth of shares [9] - The effective tax rate is expected to be around 24% [9]