ITW Reports First Quarter 2026 Results
Rhea-AI Summary
Illinois Tool Works (NYSE: ITW) reported Q1 2026 revenue of $4.02 billion (+4.6%), GAAP EPS of $2.66 (+12%), and operating margin of 25.4% (+60 bps). Operating income was $1.02 billion. Operating cash flow was $623 million and free cash flow $528 million. ITW raised full‑year GAAP EPS guidance to $11.10–$11.50 and expects revenue growth of 2–4%, operating margin of 26.5–27.5%, and ~100%+ free cash flow conversion.
Positive
- Revenue $4.02B (+4.6% QoQ)
- GAAP EPS $2.66 (+12%)
- Operating margin 25.4% (+60 bps)
- Raised full‑year GAAP EPS to $11.10–$11.50
- Share repurchases of $375M in Q1; ~$1.5B planned for 2026
Negative
- Organic revenue growth only 0.4% in Q1
- Guidance relies on FX and demand; free cash flow reconciliation omitted
- Projected effective tax rate rising to 23–24%
News Market Reaction – ITW
On the day this news was published, ITW declined 2.88%, reflecting a moderate negative market reaction. Argus tracked a trough of -2.2% from its starting point during tracking. Our momentum scanner triggered 5 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $2.27B from the company's valuation, bringing the market cap to $76.53B at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
ITW fell 1.04% with above-average volume, while key peers EMR, PH, AME, ETN and CMI also showed negative moves but did not appear on momentum scanners, pointing to stock-specific trading around earnings.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 10 | Earnings webcast notice | Neutral | -1.0% | Announcement of timing and access details for Q1 2026 earnings webcast. |
| Feb 03 | Earnings results | Positive | +5.6% | Q4 and full-year 2025 growth, margin expansion and initial 2026 guidance. |
| Jan 13 | Earnings webcast notice | Neutral | +0.8% | Scheduling of Q4 and full-year 2025 earnings release and webcast. |
| Oct 24 | Earnings results | Positive | -4.5% | Q3 2025 revenue growth, record margin, strong free cash flow and buybacks. |
| Oct 10 | Earnings webcast notice | Neutral | -1.4% | Announcement of Q3 2025 release date and webcast participation details. |
Earnings-related headlines have typically produced modest moves, with one notable positive reaction and one negative divergence.
Over the past few quarters, ITW’s earnings cycle has featured consistent updates on revenue growth, margins and capital returns. The Q3 2025 report highlighted record operating margin and ongoing buybacks, while the Q4/FY 2025 release set initial 2026 guidance for revenue growth and EPS of $11.00–$11.40. Scheduling releases (webcast notices) usually produced small price moves. Today’s Q1 2026 results and raised EPS guidance build directly on that prior 2026 outlook.
Historical Comparison
Past earnings-related headlines for ITW moved the stock by an average of -0.09%. Today’s -1.04% move on Q1 2026 results and raised guidance reflects a somewhat larger-than-typical reaction.
Earnings communications progressed from Q3 2025 results to Q4/FY 2025, which set 2026 EPS guidance of $11.00–$11.40. The current Q1 2026 release raises that range to $11.10–$11.50, indicating an upward adjustment to the existing 2026 outlook.
Market Pulse Summary
This announcement highlights steady execution: Q1 2026 revenue of $4.02 billion, operating margin of 25.4%, and GAAP EPS of $2.66, plus a higher full-year EPS range of $11.10–$11.50. Compared with earlier guidance from the Q4/FY 2025 release, the raise is incremental but directionally positive. Investors may focus on organic growth, the 120 bps benefit from enterprise initiatives, free cash flow of $528 million, and the pace of planned $1.5 billion share repurchases for 2026.
Key Terms
gaap eps financial
basis points financial
non-gaap financial measures financial
AI-generated analysis. Not financial advice.
- Revenue of
$4.02 billion , an increase of5% - Operating margin of
25.4% , an increase of 60 bps, as Enterprise Initiatives contributed 120 bps - GAAP EPS of
$2.66 , an increase of12% - Full Year 2026 GAAP EPS guidance raised by
$0.10 t o a range of$11.10 t o$11.50
GLENVIEW, Ill., April 30, 2026 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported its first quarter 2026 results and raised full year 2026 GAAP EPS guidance.
“ITW delivered a solid start to the year, marked by five percent revenue growth, margin expansion of 60 basis points to 25.4 percent, and a 12 percent increase in GAAP earnings per share to
“As we move forward, ITW’s unique and resilient business model and ‘Do What We Say’ execution ensure that we are primed to deliver robust financial performance in any environment. With a disciplined focus on our organic growth and enterprise initiatives, we expect to continue to outperform our end markets in 2026, while further increasing profitability and margins,” O’Herlihy concluded.
First Quarter 2026 Results
First quarter revenue of
GAAP EPS grew 12 percent to
2026 Guidance
ITW is raising its full year 2026 GAAP EPS guidance by
For the full year, all seven segments are expected to deliver both positive organic growth and operating margin expansion. Operating margin is projected to reach a range of 26.5 to 27.5 percent, a year-over-year improvement of approximately 100 basis points, driven by an approximate 100-basis point contribution from enterprise initiatives.
Free cash flow is projected to exceed 100 percent of net income, and the company expects to repurchase approximately
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 2026 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 2025 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
Investor Relations & Media Contact:
Erin Linnihan
Tel: 224.661.7431
investorrelations@itw.com | mediarelations@itw.com
| ILLINOIS TOOL WORKS INC. and SUBSIDIARIES STATEMENT OF INCOME (UNAUDITED) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| In millions except per share amounts | 2026 | 2025 | |||||
| Operating Revenue | $ | 4,016 | $ | 3,839 | |||
| Cost of revenue | 2,256 | 2,161 | |||||
| Selling, administrative, and research and development expenses | 722 | 706 | |||||
| Amortization and impairment of intangible assets | 18 | 21 | |||||
| Operating Income | 1,020 | 951 | |||||
| Interest expense | (73 | ) | (68 | ) | |||
| Other income (expense) | 20 | 12 | |||||
| Income Before Taxes | 967 | 895 | |||||
| Income Taxes | 199 | 195 | |||||
| Net Income | $ | 768 | $ | 700 | |||
| Net Income Per Share: | |||||||
| Basic | $ | 2.66 | $ | 2.39 | |||
| Diluted | $ | 2.66 | $ | 2.38 | |||
| Cash Dividends Per Share: | |||||||
| Paid | $ | 1.61 | $ | 1.50 | |||
| Declared | $ | 1.61 | $ | 1.50 | |||
| Shares of Common Stock Outstanding During the Period: | |||||||
| Average | 288.3 | 293.6 | |||||
| Average assuming dilution | 289.1 | 294.5 | |||||
| ILLINOIS TOOL WORKS INC. and SUBSIDIARIES STATEMENT OF FINANCIAL POSITION (UNAUDITED) | |||||||
| In millions | March 31, 2026 | December 31, 2025 | |||||
| Assets | |||||||
| Current Assets: | |||||||
| Cash and equivalents | $ | 827 | $ | 851 | |||
| Trade receivables | 3,380 | 3,227 | |||||
| Inventories | 1,726 | 1,659 | |||||
| Prepaid expenses and other current assets | 402 | 463 | |||||
| Total current assets | 6,335 | 6,200 | |||||
| Net plant and equipment | 2,230 | 2,230 | |||||
| Goodwill | 5,083 | 5,098 | |||||
| Intangible assets | 574 | 591 | |||||
| Deferred income taxes | 505 | 519 | |||||
| Other assets | 1,537 | 1,510 | |||||
| $ | 16,264 | $ | 16,148 | ||||
| Liabilities and Stockholders' Equity | |||||||
| Current Liabilities: | |||||||
| Short-term debt | $ | 2,545 | $ | 2,286 | |||
| Accounts payable | 609 | 522 | |||||
| Accrued expenses | 1,534 | 1,636 | |||||
| Cash dividends payable | 463 | 465 | |||||
| Income taxes payable | 180 | 217 | |||||
| Total current liabilities | 5,331 | 5,126 | |||||
| Noncurrent Liabilities: | |||||||
| Long-term debt | 6,603 | 6,683 | |||||
| Deferred income taxes | 158 | 154 | |||||
| Other liabilities | 942 | 959 | |||||
| Total noncurrent liabilities | 7,703 | 7,796 | |||||
| Stockholders' Equity: | |||||||
| Common stock | 6 | 6 | |||||
| Additional paid-in-capital | 1,817 | 1,771 | |||||
| Retained earnings | 30,454 | 30,150 | |||||
| Common stock held in treasury | (27,246 | ) | (26,875 | ) | |||
| Accumulated other comprehensive income (loss) | (1,802 | ) | (1,827 | ) | |||
| Noncontrolling interest | 1 | 1 | |||||
| Total stockholders' equity | 3,230 | 3,226 | |||||
| $ | 16,264 | $ | 16,148 | ||||
| ILLINOIS TOOL WORKS INC. and SUBSIDIARIES SEGMENT DATA (UNAUDITED) | ||||||||
| Three Months Ended March 31, 2026 | ||||||||
| Dollars in millions | Total Revenue | Operating Income | Operating Margin | |||||
| Automotive OEM | $ | 820 | $ | 173 | 21.0 | % | ||
| Food Equipment | 637 | 157 | 24.7 | % | ||||
| Test & Measurement and Electronics | 715 | 164 | 22.9 | % | ||||
| Welding | 507 | 163 | 32.1 | % | ||||
| Polymers & Fluids | 452 | 126 | 28.0 | % | ||||
| Construction Products | 458 | 135 | 29.4 | % | ||||
| Specialty Products | 431 | 135 | 31.3 | % | ||||
| Intersegment | (4 | ) | — | — | % | |||
| Total Segments | 4,016 | 1,053 | 26.2 | % | ||||
| Unallocated | — | (33 | ) | — | % | |||
| Total Company | $ | 4,016 | $ | 1,020 | 25.4 | % | ||
| ILLINOIS TOOL WORKS INC. and SUBSIDIARIES SEGMENT DATA (UNAUDITED) | ||||||||||||||||
| Q1 2026 vs. Q1 2025 Favorable/(Unfavorable) | ||||||||||||||||
| Operating Revenue | Automotive OEM | Food Equipment | Test & Measurement and Electronics | Welding | Polymers & Fluids | Construction Products | Specialty Products | Total ITW | ||||||||
| Organic | (0.9)% | (2.8)% | 4.6 | % | 6.0 | % | 1.7 | % | (1.3)% | (4.7)% | 0.4 | % | ||||
| Acquisitions/ Divestitures | — | % | — | % | 1.8 | % | — | % | — | % | — | % | — | % | 0.3 | % |
| Translation | 5.3 | % | 4.5 | % | 3.2 | % | 1.3 | % | 3.7 | % | 4.7 | % | 3.7 | % | 3.9 | % |
| Operating Revenue | 4.4 | % | 1.7 | % | 9.6 | % | 7.3 | % | 5.4 | % | 3.4 | % | (1.0)% | 4.6 | % | |
| Q1 2026 vs. Q1 2025 Favorable/(Unfavorable) | ||||||||
| Change in Operating Margin | Automotive OEM | Food Equipment | Test & Measurement and Electronics | Welding | Polymers & Fluids | Construction Products | Specialty Products | Total ITW |
| Operating Leverage | (20) bps | (60) bps | 130 bps | 100 bps | 40 bps | (20) bps | (80) bps | — |
| Changes in Variable Margin & OH Costs | 110 bps | (130) bps | 50 bps | (110) bps | 110 bps | 30 bps | 70 bps | 40 bps |
| Total Organic | 90 bps | (190) bps | 180 bps | (10) bps | 150 bps | 10 bps | (10) bps | 40 bps |
| Acquisitions/ Divestitures | — | — | (60) bps | — | — | — | — | (10) bps |
| Restructuring/Other | 80 bps | 10 bps | 30 bps | (30) bps | — | 10 bps | 50 bps | 30 bps |
| Total Operating Margin Change | 170 bps | (180) bps | 150 bps | (40) bps | 150 bps | 20 bps | 40 bps | 60 bps |
| Total Operating Margin % * | ||||||||
| * Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets | 30 bps | 10 bps | 140 bps | 10 bps | 100 bps | 10 bps | 20 bps | 50 bps ** |
| ** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ( | ||||||||
| 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 | 2026 | 2025 | |||||
| Numerator: | |||||||
| Net Income | $ | 768 | $ | 700 | |||
| Discrete tax benefit related to the first quarter 2026 | (34 | ) | — | ||||
| Discrete tax benefit related to the first quarter 2025 | — | (21 | ) | ||||
| Interest expense, net of tax (1) | 56 | 52 | |||||
| Other (income) expense, net of tax (1) | (15 | ) | (9 | ) | |||
| Operating income after taxes | $ | 775 | $ | 722 | |||
| Denominator: | |||||||
| Invested capital: | |||||||
| Cash and equivalents | $ | 827 | $ | 873 | |||
| Trade receivables | 3,380 | 3,153 | |||||
| Inventories | 1,726 | 1,663 | |||||
| Net plant and equipment | 2,230 | 2,085 | |||||
| Goodwill and intangible assets | 5,657 | 5,475 | |||||
| Accounts payable and accrued expenses | (2,143 | ) | (2,071 | ) | |||
| Debt | (9,148 | ) | (8,263 | ) | |||
| Other, net | 701 | 327 | |||||
| Total net assets (stockholders' equity) | 3,230 | 3,242 | |||||
| Cash and equivalents | (827 | ) | (873 | ) | |||
| Debt | 9,148 | 8,263 | |||||
| Total invested capital | $ | 11,551 | $ | 10,632 | |||
| Average invested capital (2) | $ | 11,447 | $ | 10,432 | |||
| Net income to average invested capital (3) | 26.8 | % | 26.9 | % | |||
| After-tax return on average invested capital (3) | 27.1 | % | 27.7 | % | |||
(1) Effective tax rate used for interest expense and other (income) expense for the three months ended March 31, 2026 and 2025 was
(2) 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.
(3) Returns for the three months ended March 31, 2026 and 2025 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, 2026, excluding the first quarter 2026 discrete tax benefit of
| Three Months Ended | |||||
| March 31, 2026 | |||||
| Dollars in millions | Income Taxes | Tax Rate | |||
| As reported | $ | 199 | 20.6 | % | |
| Discrete tax benefit related to the first quarter 2026 | 34 | 3.5 | % | ||
| As adjusted | $ | 233 | 24.1 | % | |
A reconciliation of the tax rate for the three month period ended March 31, 2025, excluding the first quarter 2025 discrete tax benefit of
| Three Months Ended | |||||
| March 31, 2025 | |||||
| Dollars in millions | Income 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 millions | December 31, 2025 | ||
| Numerator: | |||
| Net income | $ | 3,066 | |
| Net discrete tax benefit related to the third quarter 2025 | (27 | ) | |
| Discrete tax benefit related to the first quarter 2025 | (21 | ) | |
| Interest expense, net of tax (1) | 222 | ||
| Other (income) expense, net of tax (1) | (32 | ) | |
| Operating income after taxes | $ | 3,208 | |
| Denominator: | |||
| Invested capital: | |||
| Cash and equivalents | $ | 851 | |
| Trade receivables | 3,227 | ||
| Inventories | 1,659 | ||
| Net plant and equipment | 2,230 | ||
| Goodwill and intangible assets | 5,689 | ||
| Accounts payable and accrued expenses | (2,158 | ) | |
| Debt | (8,969 | ) | |
| Other, net | 697 | ||
| Total net assets (stockholders' equity) | 3,226 | ||
| Cash and equivalents | (851 | ) | |
| Debt | 8,969 | ||
| Total invested capital | $ | 11,344 | |
| Average invested capital (2) | $ | 10,959 | |
| Net income to average invested capital | 28.0 | % | |
| After-tax return on average invested capital | 29.3 | % | |
(1) Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2025 was
(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 2025 effective tax rate, excluding the third quarter 2025 net discrete tax benefit of
| Twelve Months Ended | |||||
| December 31, 2025 | |||||
| Dollars in millions | Income Taxes | Tax Rate | |||
| As reported | $ | 900 | 22.7 | % | |
| Net discrete tax benefit related to the third quarter 2025 | 27 | 0.7 | % | ||
| Discrete tax benefit related to the first quarter 2025 | 21 | 0.5 | % | ||
| As adjusted | $ | 948 | 23.9 | % | |
FREE CASH FLOW (UNAUDITED)
| Three Months Ended | |||||||
| March 31, | |||||||
| Dollars in millions | 2026 | 2025 | |||||
| Net cash provided by operating activities | $ | 623 | $ | 592 | |||
| Less: Additions to plant and equipment | (95 | ) | (96 | ) | |||
| Free cash flow | $ | 528 | $ | 496 | |||
| Net income | $ | 768 | $ | 700 | |||
| Net cash provided by operating activities to net income conversion rate | 81 | % | 85 | % | |||
| Free cash flow to net income conversion rate | 69 | % | 71 | % | |||
