Operating margin of 25.4%, an increase of 60 bps, as Enterprise Initiatives contributed 120 bps
GAAP EPS of $2.66, an increase of 12%
Full Year 2026 GAAP EPS guidance raised by $0.10 to a range of $11.10 to $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 $2.66. Positive demand trends continued in our capex-related segments, led by Welding and Test & Measurement and Electronics, which delivered organic growth of six percent and five percent, respectively, this quarter," said Christopher A. O'Herlihy, President and Chief Executive Officer.
"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 $4.02 billion increased by 4.6 percent. Organic revenue growth was 0.4 percent. Foreign currency translation increased revenue by 3.9 percent and an acquisition added 0.3 percent.
GAAP EPS grew 12 percent to $2.66, while operating income increased seven percent to $1.02 billion. Operating margin expanded by 60 basis points to 25.4 percent, driven by a 120-basis point contribution from enterprise initiatives. Operating cash flow was $623 million, and free cash flow was $528 million, a six percent increase representing a 69 percent conversion of net income, in line with seasonal expectations. During the quarter, the company returned capital to shareholders through the repurchase of $375 million of its own shares. The effective tax rate for the quarter was 20.6 percent.
2026 Guidance
ITW is raising its full year 2026 GAAP EPS guidance by $0.10 to a range of $11.10 to $11.50 per share, representing eight percent growth at the mid-point. Based on current demand levels and prevailing foreign exchange rates, the company continues to project revenue growth of two to four percent and organic growth of one to three percent.
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 $1.5 billion of its own shares. The projected effective tax rate is in the range of 23 to 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 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 $16 billion in 2025. 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 43,000 dedicated colleagues around the world thrive in the company's decentralized and entrepreneurial culture. www.itw.com.
Investor Relations & Media Contact: Erin LinnihanTel: 224.661.7431[email protected] | [email protected]
ILLINOIS TOOL WORKS INC. and SUBSIDIARIESSTATEMENT 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 SUBSIDIARIESSTATEMENT 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
