ITW Illinois Tool Works Inc.

ITW Reports First Quarter 2025 Results

ITW Reports First Quarter 2025 Results

  • Revenue of $3.8 billion, down 3.4%; organic growth down 1.6%, flat on an equal days’ basis
  • Operating margin of 24.8%; Enterprise Initiatives contribute 120 bps
  • GAAP EPS of $2.38, ahead of plan expectations
  • Maintaining full year 2025 guidance; ongoing pricing actions offset tariff cost impacts

GLENVIEW, Ill., April 30, 2025 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported its first quarter 2025 results and maintained guidance for full year 2025.

“ITW commenced 2025 with solid execution, achieving financial results ahead of plan expectations as we continued to outperform underlying end markets,” said Christopher A. O’Herlihy, President and Chief Executive Officer. “Acknowledging the uncertain external environment, we are maintaining our full year 2025 guidance as we expect our ongoing pricing actions to offset tariff cost impacts. ITW is built to outperform in today's volatile environment. Our largely “produce where we sell” manufacturing strategy, decentralized operating culture which enables rapid “read and react” response, and diversified high-quality business portfolio all provide resilience during times of volatility and uncertainty. Our strong financial profile allows us to maintain our strategic investments and focus on driving continued progress on our long-term strategy to make above-market organic growth, fueled by Customer-back Innovation, into a core ITW strength,” O’Herlihy concluded.

First Quarter 2025 Results

First quarter revenue of $3.8 billion declined by 3.4 percent as organic revenue declined by 1.6 percent. On an equal days’ basis, organic revenue was essentially flat. Foreign currency translation impact reduced revenue by 1.8 percent.

First quarter 2024 GAAP EPS of $2.73 and operating margin of 28.4 percent included a one-time inventory accounting change which benefited EPS by $0.29 and operating margin by 300 basis points. For comparison purposes, the following year-over-year references exclude this one-time item.

GAAP EPS for the first quarter of 2025 of $2.38 declined two percent and included approximately $0.10 of headwind from higher restructuring expenses and unfavorable foreign currency translation impact. Operating margin of 24.8 percent declined 60 basis points as enterprise initiatives contributed 120 basis points, offset by higher restructuring expenses related to 80/20 Front-to-Back projects and other one-time items. Operating cash flow was $592 million, and free cash flow was $496 million with a conversion of 71 percent to net income. During the quarter, the company repurchased $375 million of its own shares. The effective tax rate was 21.7 percent which included a discrete tax benefit of $21 million related to the reversal of valuation allowances on net operating loss carryforwards.

2025 Guidance

ITW is maintaining its full year 2025 GAAP EPS guidance range of $10.15 to $10.55 per share which includes on-going pricing actions that are projected to offset tariff cost impacts. The Company is projecting revenue and organic growth of zero to two percent based on current levels of demand adjusted for incremental pricing associated with tariffs and current foreign exchange rates. Operating margin is projected to be in the range of 26.5 to 27.5 percent, with enterprise initiatives contributing 100 basis points or more. Free cash flow is expected to exceed 100 percent of net income, and the company plans to repurchase approximately $1.5 billion of its own shares. The projected effective tax rate is approximately 24 percent.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.

Forward-looking Statements

This earnings release contains 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 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 total revenue, operating and incremental margin, price/cost impact, statements regarding diluted income per share, expected dividend payments, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, the impact of recent or potential acquisitions and/or divestitures, and the Company’s 2025 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the Company’s expectations include those that are detailed in ITW’s Form 10-K for 2024 and subsequent reports filed with the SEC.

About Illinois Tool Works

ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $15.9 billion in 2024. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 44,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture.

Investor Relations & Media Contact:

Erin Linnihan

Tel: 224.661.7431

 | 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF INCOME (UNAUDITED)
 
 Three Months Ended
 March 31,
In millions except per share amounts 2025   2024 
Operating Revenue$3,839  $3,973 
Cost of revenue 2,161   2,145 
Selling, administrative, and research and development expenses 706   676 
Amortization and impairment of intangible assets 21   25 
Operating Income 951   1,127 
Interest expense (68)  (71)
Other income (expense) 12   16 
Income Before Taxes 895   1,072 
Income Taxes 195   253 
Net Income$700  $819 
    
Net Income Per Share:   
Basic$2.39  $2.74 
Diluted$2.38  $2.73 
    
Cash Dividends Per Share:   
Paid$1.50  $1.40 
Declared$1.50  $1.40 
    
Shares of Common Stock Outstanding During the Period:   
Average 293.6   298.9 
Average assuming dilution 294.5   300.0 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION (UNAUDITED)
 
In millionsMarch 31,

2025
 December 31,

2024
Assets   
Current Assets:   
Cash and equivalents$873  $948 
Trade receivables 3,153   2,991 
Inventories 1,663   1,605 
Prepaid expenses and other current assets 348   312 
Total current assets 6,037   5,856 
    
Net plant and equipment 2,085   2,036 
Goodwill 4,903   4,839 
Intangible assets 572   592 
Deferred income taxes 440   369 
Other assets 1,431   1,375 
 $15,468  $15,067 
    
Liabilities and Stockholders' Equity   
Current Liabilities:   
Short-term debt$981  $1,555 
Accounts payable 594   519 
Accrued expenses 1,477   1,576 
Cash dividends payable 439   441 
Income taxes payable 289   217 
Total current liabilities 3,780   4,308 
    
Noncurrent Liabilities:   
Long-term debt 7,282   6,308 
Deferred income taxes 127   119 
Other liabilities 1,037   1,015 
Total noncurrent liabilities 8,446   7,442 
    
Stockholders' Equity:   
Common stock 6   6 
Additional paid-in-capital 1,705   1,669 
Retained earnings 29,154   28,893 
Common stock held in treasury (25,746)  (25,375)
Accumulated other comprehensive income (loss) (1,878)  (1,877)
Noncontrolling interest 1   1 
Total stockholders' equity 3,242   3,317 
 $15,468  $15,067 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)



Three Months Ended March 31, 2025
Dollars in millionsTotal

Revenue
Operating

Income
Operating

Margin
Automotive OEM$786 $151 19.3%
Food Equipment 627  166 26.5%
Test & Measurement and Electronics 652  139 21.4%
Welding 472  153 32.5%
Polymers & Fluids 429  114 26.5%
Construction Products 443  130 29.2%
Specialty Products 435  135 30.9%
Intersegment (5)  %
Total Segments 3,839  988 25.7%
Unallocated   (37)%
Total Company$3,839 $951 24.8%



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)



Q1 2025 vs. Q1 2024 Favorable/(Unfavorable)
Operating RevenueAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Organic(1.2)%1.2 %(5.4)%0.1 %1.7 %(7.4)%0.9 %(1.6)%
Acquisitions/

Divestitures
— %— %0.1 %— %— %— %— %— %
Translation(2.5)%(1.9)%(1.0)%(1.0)%(2.5)%(1.8)%(1.9)%(1.8)%
Operating Revenue(3.7)%(0.7)%(6.3)%(0.9)%(0.8)%(9.2)%(1.0)%(3.4)%



Q1 2025 vs. Q1 2024 Favorable/(Unfavorable)
Change in Operating MarginAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Operating Leverage(30) bps20 bps(150) bps30 bps(140) bps20 bps(30) bps
Changes in Variable Margin & OH Costs60 bps20 bps40 bps(50) bps50 bps120 bps140 bps(290) bps
Total Organic30 bps40 bps(110) bps(50) bps80 bps(20) bps160 bps(320) bps
Acquisitions/

Divestitures
(30) bps(10) bps
Restructuring/Other(80) bps10 bps(60) bps30 bps(10) bps(40) bps(30) bps
Total Operating Margin Change(50) bps50 bps(200) bps(20) bps70 bps(20) bps120 bps(360) bps
         
Total Operating Margin % *19.3%26.5%21.4%32.5%26.5%29.2%30.9%24.8%
         
* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets 20 bps 30 bps 150 bps 10 bps 150 bps 10 bps 20 bps 60 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.05) on GAAP earnings per share for the first quarter of 2025.



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)
 
AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)
 
 Three Months Ended
 March 31,
Dollars in millions 2025   2024 
Numerator:   
Net Income$700  $819 
Discrete tax benefit related to the first quarter 2025 (21)   
Cumulative effect of change in inventory accounting method, net of tax (1)    (88)
Interest expense, net of tax (2) 52   54 
Other (income) expense, net of tax (2) (9)  (12)
Operating income after taxes$722  $773 
    
Denominator:   
Invested capital:   
Cash and equivalents$873  $959 
Trade receivables 3,153   3,238 
Inventories 1,663   1,825 
Net plant and equipment 2,085   1,973 
Goodwill and intangible assets 5,475   5,557 
Accounts payable and accrued expenses (2,071)  (2,109)
Debt (8,263)  (8,325)
Other, net 327   (97)
Total net assets (stockholders' equity) 3,242   3,021 
Cash and equivalents (873)  (959)
Debt 8,263   8,325 
Total invested capital$10,632  $10,387 
    
Average invested capital (3)$10,432  $10,249 
    
Net income to average invested capital (4) 26.9%  32.0%
After-tax return on average invested capital (4) 27.7%  30.1%
 

(1) Represents the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses in the first quarter of 2024 ($117 million pre-tax, or $88 million after-tax).

(2) Effective tax rate used for interest expense and other (income) expense for the three months ended March 31, 2025 and 2024 was 24.0% and 23.6%, respectively.

(3) Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of the periods presented.

(4) Returns for the three months ended March 31, 2025 and 2024 were converted to an annual rate by multiplying the calculated return by 4.

A reconciliation of the tax rate for the three month period ended March 31, 2025, excluding the first quarter 2025 discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards, is as follows:

 Three Months Ended
 March 31, 2025
Dollars in millionsIncome Taxes Tax Rate
As reported$195 21.7%
Discrete tax benefit related to the first quarter 2025 21 2.3%
As adjusted$216 24.0%



AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)
 
 Twelve Months Ended
Dollars in millionsDecember 31, 2024
Numerator: 
Net income$3,488 
Net discrete tax benefit related to the third quarter 2024 (121)
Interest expense, net of tax (1) 215 
Other (income) expense, net of tax (1) (336)
Operating income after taxes$3,246 
  
Denominator: 
Invested capital: 
Cash and equivalents$948 
Trade receivables 2,991 
Inventories 1,605 
Net plant and equipment 2,036 
Goodwill and intangible assets 5,431 
Accounts payable and accrued expenses (2,095)
Debt (7,863)
Other, net 264 
Total net assets (stockholders' equity) 3,317 
Cash and equivalents (948)
Debt 7,863 
Total invested capital$10,232 
  
Average invested capital (2)$10,419 
  
Net income to average invested capital 33.5%
After-tax return on average invested capital 31.2%
  

(1) Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2024 was 23.8%.

(2) Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within the period presented.

A reconciliation of the 2024 effective tax rate excluding the third quarter 2024 net discrete tax benefit of $121 million, which included favorable discrete tax benefits of $107 million related to the utilization of capital loss carryforwards upon the sale of Wilsonart and $87 million related to a reorganization of the Company's intellectual property, partially offset by a $73 million discrete tax expense related to the remeasurement of unrecognized tax benefits associated with various intercompany transactions, is as follows:

 Twelve Months Ended
 December 31, 2024
Dollars in millionsIncome Taxes Tax Rate
As reported$934 21.1%
Net discrete tax benefit related to the third quarter 2024 121 2.7%
As adjusted$1,055 23.8%



FREE CASH FLOW (UNAUDITED)
 
 Three Months Ended
 March 31,
Dollars in millions 2025   2024 
Net cash provided by operating activities$592  $589 
Less: Additions to plant and equipment (96)  (95)
Free cash flow$496  $494 
    
Net income$700  $819 
    
Net cash provided by operating activities to net income conversion rate 85%  72%
Free cash flow to net income conversion rate(1) 71%  60%
 

(1) Excluding the impact of the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses in the first quarter of 2024 ($117 million pre-tax, or $88 million after-tax), the free cash flow to net income conversion rate for the three months ended March 31, 2024 would have been 68%.



ADJUSTED NET INCOME PER SHARE - DILUTED (UNAUDITED)
 
 Three Months Ended Twelve Months Ended
 March 31, 2024 December 31, 2024
As reported$2.73  $11.71 
Cumulative effect of change in inventory accounting method, net of tax (1) (0.29)  (0.30)
Impact of sale of noncontrolling interest in Wilsonart (2)    (1.26)
As adjusted$2.44  $10.15 
 

(1) Represents the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses in the first quarter of 2024 ($117 million pre-tax, or $88 million after-tax).

(2) Includes the $363 million pre-tax gain on the sale of noncontrolling interest in Wilsonart and related taxes in the third quarter of 2024.



EN
30/04/2025

Underlying

To request access to management, click here to engage with our
partner Phoenix-IR's CorporateAccessNetwork.com

Reports on Illinois Tool Works Inc.

 PRESS RELEASE

ITW Reports First Quarter 2025 Results

ITW Reports First Quarter 2025 Results Revenue of $3.8 billion, down 3.4%; organic growth down 1.6%, flat on an equal days’ basisOperating margin of 24.8%; Enterprise Initiatives contribute 120 bpsGAAP EPS of $2.38, ahead of plan expectationsMaintaining full year 2025 guidance; ongoing pricing actions offset tariff cost impacts GLENVIEW, Ill., April 30, 2025 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported its first quarter 2025 results and maintained guidance for full year 2025. “ITW commenced 2025 with solid execution, achieving financial results ahead of pl...

 PRESS RELEASE

ITW Schedules First Quarter 2025 Earnings Webcast

ITW Schedules First Quarter 2025 Earnings Webcast GLENVIEW, Ill., April 15, 2025 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) will issue its first quarter 2025 results on Wednesday, April 30, 2025, at 7:00 a.m. CDT. Following the release, ITW will hold its first quarter 2025 earnings webcast at 9:00 a.m. CDT. To access the webcast for the event, please click on the following link: If you are a participant on the conference call, please dial 1-888-660-6652 (domestic) or 1-646-960-0554 (international) 10 minutes prior to the 9:00 a.m. CDT start time. The passcode is “ITW.” Fo...

 PRESS RELEASE

ITW Board of Directors Declares Quarterly Dividend

ITW Board of Directors Declares Quarterly Dividend GLENVIEW, Ill., Feb. 14, 2025 (GLOBE NEWSWIRE) -- The Board of Directors of Illinois Tool Works Inc. (NYSE: ITW) declared a dividend on the company's common stock of $1.50 per share for the first quarter of 2025. The dividend equates to $6.00 per share on a full-year basis. The dividend will be paid on April 10, 2025 to shareholders of record as of March 31, 2025. About Illinois Tool WorksITW (NYSE: ITW) is a Fortune 300 global multi-industry manufacturing leader with revenue of $15.9 billion in 2024. The company’s seven industry-leadi...

 PRESS RELEASE

ITW Reports Fourth Quarter and Full Year 2024 Results

ITW Reports Fourth Quarter and Full Year 2024 Results Fourth Quarter 2024 Highlights Revenue of $3.9 billion, a decrease of 1.3% as organic growth declined 0.5%; Organic growth of 0.4% turned positive excluding Product Line Simplification (PLS) reduction of 0.9%Record operating margin of 26.2%, an increase of 140 bps as enterprise initiatives contributed 120 bpsOperating cash flow of $1.1B; record free cash flow of $1B, an increase of 10% with a conversion of 133%GAAP EPS of $2.54, an increase of 7% 2024 Highlights Revenue of $15.9 billion, a decrease ...

MarketLine Department
  • MarketLine Department

Lincoln Electric Holdings, Inc. - Mergers & Acquisitions (M&A), Partne...

Summary Marketline's Lincoln Electric Holdings, Inc. Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments report includes business description, detailed reports on mergers and acquisitions (M&A), divestments, capital raisings, venture capital investments, ownership and partnership transactions undertaken by Lincoln Electric Holdings, Inc. - Mergers & Acquisitions (M&A), Partnerships & Alliances since January2007. Marketline's Company Mergers & Acquisitions (M&A), Partnerships...

ResearchPool Subscriptions

Get the most out of your insights

Get in touch