ITW

A month has gone by since the last earnings report for Illinois Tool Works (ITW). Shares have lost about 2.4% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Illinois Tool Works due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Illinois Tool reported second-quarter 2026 adjusted earnings of $2.84 per share, which surpassed the Zacks Consensus Estimate of $2.80. Earnings increased 10.1% year over year.Illinois Tool’s revenues of $4.30 billion beat the consensus estimate of $4.18 billion. The top line increased 6.1% year over year, driven by an organic sales growth of 4.5%. Favorable foreign currency translation and acquisitions had a positive impact of 1.4% and 0.2%, respectively, in the quarter. Test & Measurement and Electronics’ revenues were $769 million, up 12.1% year over year. Revenues from Automotive Original Equipment Manufacturer increased 1.3% year over year to $857 million. Food Equipment generated revenues of $692 million, up 1.6% year over year. Welding revenues were $549 million, up 14.7% year over year.Construction Products’ revenues were up 4.3% year over year to $494 million. Revenues of $468 million from Specialty Products reflected an increase of 3% year over year. Polymers & Fluids’ revenues of $476 million increased 8.8% year over year. Illinois Tool’s cost of sales increased 5.8% year over year to $2.40 billion. Selling, administrative and research and development expenses increased 6.1% year over year to $735 million. The operating margin was 26.7%, up 40 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin. At the end of the second quarter, Illinois Tool had cash and equivalents of $839 million compared with $851 million at the end of December 2025. Long-term debt was $6.55 billion compared with $6.68 billion at the end of December 2025.In the second quarter of 2026, Illinois Tool generated net cash of $723 million from operating activities, reflecting an increase of 31.5% from the year-ago number. Capital spending on the purchase of plant and equipment was $92 million, down 8.9% year over year. Free cash flow was $631 million, up 40.5% year over year. Illinois Tool raised its full-year 2026 financial guidance. It now expects earnings to be in the range of $11.35-$11.55 per share compared with $11.10-$11.50 expected earlier. Revenues are expected to increase 4-5% while organic revenues are anticipated to rise 3-4%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute more than 100 bps to the operating margin.Illinois Tool projects free cash flow to be more than 100% of its net income. The company expects to repurchase about $1.5 billion worth of shares. The effective tax rate is expected to be 23-24%. In the past month, investors have witnessed a upward trend in fresh estimates. Currently, Illinois Tool Works has a average Growth Score of C, a score with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Illinois Tool Works has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Illinois Tool Works is part of the Zacks Manufacturing - General Industrial industry. Over the past month, Dover Corporation (DOV), a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended June 2026 more than a month ago. Dover reported revenues of $2.19 billion in the last reported quarter, representing a year-over-year change of +6.9%. EPS of $2.74 for the same period compares with $2.44 a year ago. For the current quarter, Dover is expected to post earnings of $2.86 per share, indicating a change of +9.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Dover. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report Dover Corporation (DOV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The rally that moved the stock leaned on two of three segments; the backlog behind it grew without anyone waiting longer. Nordson (NDSN) closed Thursday at $334.70, an 8.0% gain in a single session and a 52-week high, while the S&P 500 fell 0.8% and peers Graco (GGG), Illinois Tool Works (ITW) and Parker Hannifin (PH) all finished lower. The move followed record fiscal Q3 2026 results and a raised full-year outlook. The quarter explains the direction; the order book explains the size. The Raise Is Not Evenly Owned Across The Three Segments Sales of $818 million were a quarterly record, up 10% year over year in total and 12% organically, and adjusted earnings per share cleared the high end of the company's own third-quarter guidance by ten cents. The full-year adjusted earnings guide was raised to $11.80 to $12 per diluted share. Organic sales grew 31% at Advanced Technology Solutions and about 11% at Medical and Fluid Solutions, against 3% at Industrial Precision Solutions, which management calls half the company. By management's account, the upside came from Advanced Technology Solutions and the medical business, while Industrial Precision Solutions ran as expected at the 3% that is its long-term goal. That is a narrow base for a move this size. Why That Backlog Is Orders Rather Than A Queue Backlog left the quarter up 35% from a year earlier, and a number that size normally deserves suspicion: backlog also swells when a company cannot ship, and the queue then reads as demand. Management's account is the opposite: lead times have come down rather than stretched, and roughly 80% of the backlog still turns within about six months. A book that mostly clears in half a year and is a third larger is intake, not congestion. Advanced Technology's growth, meanwhile, runs through two product lines, Electronics Dispense and Test and Inspection, whose X-ray and optical technologies management calls critical to semiconductor packaging. Much of that demand sits in Asia today, and by management's account the North American chip manufacturing buildout has produced no Nordson orders yet. What Is Left When The Systems Orders Stop About 60% of what the company sells generates recurring revenue, including aftermarket parts, consumables and services, and that revenue keeps earning when systems orders pause. Free cash flow was $237 million in the quarter, the fifth consecutive quarter of converting well over 100% of net income. Cash generation of that kind is one of the things the Trefis High Quality Portfolio looks for in its holdings. Management Named The Peak While The Market Bid The Stock Higher Advanced Technology sits at the peak of its cycle by management's own description, and fiscal 2027 growth there is expected to build off that peak at a mid-single-digit rate. The same account holds that the cycle still has room, with demand strong heading into fiscal 2027. The two reconcile as a rate against a level: the growth rate steps down from here, the record base it steps down from does not, and North American orders are still outside the numbers entirely. Whether the guide keeps moving up is the thing to watch, and a screen built on guidance revisions is where that shows across the market. Enjoy The Move, Then Check What It Did To Your Allocation A move like this is even better to own than to watch, and it is also how one holding grows into an outsized share of a portfolio. A position that has grown large enough to matter is worth sizing deliberately rather than by accident. What a position that size would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.

Interested in Illinois Tool Works Inc.? Here are five stocks we like better. Record profitability: ITW delivered 4.5% organic growth, a 26.7% operating margin and 10% GAAP EPS growth to $2.84 in Q2, with operating income rising 7.4% to $1.15 billion. Capital-expenditure businesses led growth: Welding grew 14% organically, while Test & Measurement and Electronics rose 10%, driven by strong semiconductor and electronics demand. Customer-Back Innovation contributed 3% to first-half revenue growth. Full-year outlook raised: ITW increased its 2026 organic growth forecast to 3%-4% and GAAP EPS guidance to $11.35-$11.55, while maintaining its 26.5%-27.5% operating-margin target and planning roughly $1.5 billion in share repurchases. A Weaker Dollar Could Put These 3 Industrial Stocks Back in Focus Illinois Tool Works (NYSE:ITW) reported record second-quarter operating income as growth accelerated in several capital-expenditure-related businesses, prompting the company to raise its full-year organic growth and earnings outlook. Chief Executive Officer Chris O'Herlihy said the company generated 4.5% organic growth in the second quarter, expanded operating margin to 26.7%, and increased GAAP earnings per share 10% to $2.84. Operating income rose 7.4% to $1.15 billion, which O'Herlihy described as the most profitable quarter in the company's history. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit 3 Industrial Stocks Making New All-Time Highs Total revenue increased 6.1%, including 4.5% organic growth, a 1.4% benefit from foreign currency translation, and a 0.2% contribution from an acquisition, according to Chief Financial Officer Michael Larsen. ITW's strongest second-quarter growth came from businesses tied to capital spending and semiconductor production. Welding posted 14% organic growth, while Test & Measurement and Electronics grew 10%. Polymers and Fluids recorded 7% organic growth. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Boring is Beautiful, Illinois Tool Works Stock Fits the Bill Within Test & Measurement and Electronics, electronics revenue climbed 21%. Larsen said the principal drivers were electronic assembly operations serving the printed circuit board market and semiconductor-related operations serving chip manufacturers. He said the businesses have expanded capacity, differentiated product portfolios, and customer-facing capabilities that have enabled them to capture demand and gain share. Welding generated record revenue, with equipment sales rising 19%. North America, which represents roughly 85% of the segment, grew 19% amid broad-based demand across industrial and commercial markets, including infrastructure, energy, aerospace and defense. The segment's operating margin remained 32.4%. → 2 Stocks Built to Thrive If Inflation Refuses to Fade Larsen said order growth continued to exceed revenue growth in both welding and Test & Measurement and Electronics, resulting in somewhat more backlog than normal for ITW. However, he said the company generally does not carry a large backlog and bases its forecasts primarily on current run rates and customer feedback. “We’re very confident going into the back half of the year based on what we see in terms of the order rates, based on what we hear from our customers,” Larsen said. A storm damaged one manufacturing facility and one warehouse at two ITW welding locations in Appleton, Wisconsin, shortly before the call. Larsen said all employees were safe and accounted for, contingency plans were being executed, and the company did not expect a material effect on its guidance. Management highlighted Customer-Back Innovation, or CBI, as a key contributor to first-half results. CBI contributed 3% to revenue growth in the first half, up from 2.4% for full-year 2025. O'Herlihy said sustaining a CBI contribution above 3% is central to ITW's objective of generating enterprise organic growth of 4% or more over time. He said the company launched its innovation framework in the second half of 2024 and has implemented it across divisions and segments. Management measures CBI as incremental revenue from products introduced during the prior three years, net of any cannibalization of existing products. O'Herlihy said it is also one of four long-term performance metrics used in employee compensation. Polymers and Fluids was a notable beneficiary of the initiative, with CBI contributing nearly 5% in the segment during the quarter, according to O'Herlihy. The segment's 7% organic growth included 7% growth in automotive aftermarket, 7% growth in polymers, and 8% growth in fluids. Its operating margin expanded 160 basis points to a record 29.3%. Companywide operating margin rose 40 basis points from a year earlier to 26.7%, aided by 120 basis points from enterprise initiatives. Price increases exceeded higher raw-material costs in dollar terms, Larsen said, though the timing lag between inflation and pricing actions reduced margin by 40 basis points in the quarter. The company cited inflation in crude-oil derivatives such as resins and chemicals, along with logistics, freight and electronic components. Larsen said ITW expects to recover the margin effect over time through pricing, productivity and strategic sourcing efforts. Resin and crude-oil prices were trending lower in the third quarter while price increases were moving through, he said. Among other segments, Automotive OEM revenue was roughly flat organically, with North America and China each up 1% and Europe down 5%. The segment's operating margin improved 30 basis points to 21.6%. Food Equipment was flat organically, as 5% service growth offset a 2% decline in equipment revenue. ITW expects Food Equipment organic growth and margins to improve in the second half. Construction Products posted 2% organic growth, its highest rate in four years, while Specialty Products revenue rose 3%, including 2% organic growth. Specialty Products margin faced the company's largest price-cost headwind during the quarter, Larsen said. ITW raised its 2026 organic growth forecast to 3% to 4%, from a prior range of 1% to 3%. The new midpoint of 3.5% represents a 1.5-percentage-point increase from prior guidance and implies 4.5% organic growth during the second half, management said. GAAP EPS guidance was raised by $0.15 to $11.35 to $11.55, with a midpoint of $11.45. Operating margin guidance was maintained at 26.5% to 27.5%. Free cash flow conversion is expected to exceed 100% of net income. Full-year share repurchases are projected at about $1.5 billion. ITW bought back $750 million of stock during the second quarter, or about 1% of its outstanding shares, at an average price of $255 per share. The company said it pulled forward repurchases that had originally been planned for the third quarter. ITW also returned more than $1.2 billion to shareholders during the quarter through dividends and repurchases. Larsen said the company has not included any material potential tariff refunds in its updated outlook. Illinois Tool Works Inc (ITW) is a diversified industrial manufacturer that designs and produces a broad array of engineered products, consumables and related service solutions for industrial customers. Its offerings span engineered fastening systems, specialty components, industrial equipment, welding products, foodservice and packaging equipment, adhesives and polymer products, and test-and-measurement technologies. These products are used as critical inputs by customers across automotive, construction, electronics, foodservice, maintenance and other industrial end markets. The company operates a decentralized business model in which independently managed businesses focus on niche product lines and close customer relationships. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Illinois Tool Works Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Top-line acceleration was propelled by a significant surge in CapEx-related segments, specifically Welding and Test & Measurement and Electronics, which grew 14% and 10% respectively. Customer-Back Innovation (CBI) contributed 3% to first-half revenue growth, exceeding the 2.4% contribution seen in 2025 and serving as the primary catalyst for sustained 4% enterprise organic growth. Operating margins reached 26.7% despite a 40-basis-point temporary dilution caused by timing lags between raw material inflation and price adjustments. Enterprise initiatives remained a core driver of profitability, contributing 120 basis points to operating margin expansion during the quarter. Management attributes the record profitability to the successful execution of the enterprise strategy and a resilient portfolio that capitalizes on strengthening order activity across industrial end markets. The company reported its most profitable quarter in history, with sequential revenue growth of 7% significantly outpacing the historical average of 2%. Full-year organic growth guidance was raised to 3.5% at the midpoint, reflecting sustained 4.5% organic growth expectations for the second half of 2026. Management assumes a 40% incremental margin for the full year as price/cost timing lags are expected to be recovered over the coming quarters. The 2030 performance goal of 30% plus operating margin remains on track, supported by high-margin new product launches and continuous 80/20 execution. Guidance assumes current demand levels adjusted for typical seasonality and prevailing exchange rates, with no material impact expected from recent storm damage at Wisconsin facilities. Automotive OEM is projected to outpace global builds by 200 to 300 basis points, even as global production is expected to be down 2% for the year. A storm damaged two welding facilities in Appleton, Wisconsin; however, management expects no material financial impact due to active contingency planning. Price/cost headwinds were most pronounced in the Specialty Products and Automotive segments due to crude oil derivative and resin price volatility. The company opportunistically pulled forward $750 million in share repurchases from Q3 into Q2 to capitalize on market conditions. Management explicitly excluded any potential tariff refunds from the updated 2026 guidance, citing no expectation of material recovery. Order activity in Welding and Test & Measurement is currently outpacing revenue rates, leading to a higher-than-normal backlog for these segments. Management expressed high confidence in second-half sustainability based on current order rates and customer feedback. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. CBI is measured as incremental revenue from products introduced within the last three years, with cannibalization of old products explicitly netted out. Progress in CBI is now one of the four long-term metrics used to determine compensation for division-level management and above. The company remains active but disciplined, noting that valuations have not significantly decreased despite the current environment. Management is prepared to wait for high-quality deals that allow for the application of the ITW business model, prioritizing organic growth in the interim. Management does not believe the segment has hit a ceiling at 32% margins; current levels were slightly suppressed by price/cost lags and higher sales commissions. Expectations remain for further margin improvement as the business grows and recovers inflationary costs. The 40-basis-point headwind in Q2 is expected to narrow to 30 basis points in Q3 and 20 basis points in Q4. Management anticipates returning to a 'normal' positive price/cost contribution of 10 to 20 basis points in 2027.

Illinois Tool Works Inc. ITW reported second-quarter 2026 adjusted earnings of $2.84 per share, which surpassed the Zacks Consensus Estimate of $2.80. Earnings increased 10.1% year over year.Illinois Tool’s revenues of $4.30 billion beat the consensus estimate of $4.18 billion. The top line increased 6.1% year over year, driven by an organic sales growth of 4.5%. Favorable foreign currency translation and acquisitions had a positive impact of 1.4% and 0.2%, respectively, in the quarter. Test & Measurement and Electronics’ revenues were $769 million, up 12.1% year over year. Revenues from Automotive Original Equipment Manufacturer increased 1.3% year over year to $857 million. Our estimate for segmental revenues was $866 million.Food Equipment generated revenues of $692 million, up 1.6% year over year. Our estimate for segmental revenues was $695 million. Welding revenues were $549 million, up 14.7% year over year.Construction Products’ revenues were up 4.3% year over year to $494 million. Our estimate for segmental revenues was $482 million. Revenues of $468 million from Specialty Products reflected an increase of 3% year over year. Our estimate for segmental revenues was $465 million. Polymers & Fluids’ revenues of $476 million increased 8.8% year over year. Our estimate for segmental revenues was $451 million. Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote Illinois Tool’s cost of sales increased 5.8% year over year to $2.40 billion. Selling, administrative and research and development expenses increased 6.1% year over year to $735 million. The operating margin was 26.7%, up 40 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin. At the end of the second quarter, Illinois Tool had cash and equivalents of $839 million compared with $851 million at the end of December 2025. Long-term debt was $6.55 billion compared with $6.68 billion at the end of December 2025.In the second quarter of 2026, Illinois Tool generated net cash of $723 million from operating activities, reflecting an increase of 31.5% from the year-ago number. Capital spending on the purchase of plant and equipment was $92 million, down 8.9% year over year. Free cash flow was $631 million, up 40.5% year over year. Illinois Tool raised its full-year 2026 financial guidance. ITW now expects earnings to be in the range of $11.35-$11.55 per share compared with $11.10-$11.50 expected earlier. Revenues are expected to increase 4-5% while organic revenues are anticipated to rise 3-4%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute more than 100 bps to the operating margin.Illinois Tool projects free cash flow to be more than 100% of its net income. The company expects to repurchase about $1.5 billion worth of shares. The effective tax rate is expected to be 23-24%. The company currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are discussed below:Applied Industrial Technologies AIT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%.  In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.Dover Corporation DOV presently carries a Zacks Rank of 2. Dover’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 1.8%. In the past 60 days, the Zacks Consensus Estimate for DOV’s 2026 earnings has increased 0.5%.Generac Holdings GNRC currently carries a Zacks Rank of 2. Generac Holdings’ earnings topped the consensus estimate twice and missed on the other two occasions in the trailing four quarters. The average earnings surprise was 7.4%. In the past 60 days, the Zacks Consensus Estimate for GNRC’s 2026 earnings has been stable. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report Dover Corporation (DOV) : Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report Generac Holdings Inc. (GNRC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Illinois Tool Works (ITW) came out with quarterly earnings of $2.84 per share, beating the Zacks Consensus Estimate of $2.8 per share. This compares to earnings of $2.58 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.43%. A quarter ago, it was expected that this equipment manufacturer for the transportation, power, food and construction industries would post earnings of $2.55 per share when it actually produced earnings of $2.66, delivering a surprise of +4.31%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Illinois Tool Works, which belongs to the Zacks Manufacturing - General Industrial industry, posted revenues of $4.3 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.83%. This compares to year-ago revenues of $4.05 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Illinois Tool Works shares have added about 15.6% since the beginning of the year versus the S&P 500's gain of 8.3%. While Illinois Tool Works has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Illinois Tool Works was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.96 on $4.18 billion in revenues for the coming quarter and $11.37 on $16.57 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - General Industrial is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Gates Industrial (GTES), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 31. This manufacturer of power transmission and fluid power systems is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +2.6%. The consensus EPS estimate for the quarter has been revised 2.4% lower over the last 30 days to the current level. Gates Industrial's revenues are expected to be $922.4 million, up 4.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report Gates Industrial Corporation PLC (GTES) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Organic Growth: 4.5% in Q2 2026. Operating Margin: Expanded to 26.7%. GAAP EPS: Increased by 10% to $2.84. Operating Income: Reached $1.15 billion, a 7.4% increase. Free Cash Flow: Expanded by 41% with a 77% conversion rate. Shareholder Returns: Over $1.2 billion returned through dividends and share repurchases. Revenue Growth: Total revenue grew 6.1% in Q2. Segment Performance: Welding (14% organic growth), Test & Measurement and Electronics (10% organic growth), Polymers & Fluids (7% organic growth). Full Year Guidance: Organic growth raised to 3% to 4%, GAAP EPS guidance increased to $11.35 to $11.55. Share Repurchases: $750 million in Q2, approximately 1% of outstanding shares. Warning! GuruFocus has detected 4 Warning Sign with NBTB. Is ITW fairly valued? Test your thesis with our free DCF calculator. Release Date: July 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Illinois Tool Works Inc (NYSE:ITW) reported a strong operational and financial performance in Q2 2026, with a 4.5% organic growth and a 10% increase in GAAP EPS to $2.84. The company achieved a record operating income of $1.15 billion, marking the most profitable quarter in its history. Significant growth was observed in CapEx-related businesses, with Welding growing by 14%, Test & Measurement and Electronics by 10%, and Polymers & Fluids by 7%. Free cash flow expanded by 41%, and the company returned over $1.2 billion to shareholders through dividends and share repurchases. ITW raised its full-year guidance for both top and bottom lines, with organic growth guidance increased by 1.5 percentage points to a midpoint of 3.5% and EPS guidance raised by $0.15 to a midpoint of $11.45. Despite strong performance, the company faced a temporary 40 basis point margin dilution due to timing lags between inflation and price adjustments. Organic revenue in the Automotive OEM segment was flat, with Europe experiencing a 5% decline. Food Equipment segment saw flat organic revenue, with a 2% decline in equipment sales despite service strength. The company experienced a storm impact on two of its Welding facilities, although it does not expect any material impact on overall guidance. Price-cost timing lags posed a headwind, particularly in the Specialty Products segment, affecting margin improvements. Q: Chris and Mike, the growth in your CapEx-focused segments was impressive. Can you talk about the durability of that growth and whether you're building significant backlog in those segments? A: Christopher O'Herlihy, President and CEO, explained that while ITW typically doesn't carry much backlog, the order activity in Welding and Test & Measurement and Electronics has been ahead of revenue rates, leading to some backlog. He expressed confidence in sustaining growth in the back half of the year, supported by customer-back innovation (CBI). Q: Can you provide more insight into the CBI contribution and its sustainability? A: Christopher O'Herlihy noted that CBI contributed 3% to growth in the first half, which is ahead of expectations. He emphasized the strong momentum and engagement in CBI across divisions, suggesting that the innovation progress is sustainable and will continue to contribute to growth. Q: Are you seeing any improvement in organic growth trends across segments? A: Michael Larsen, CFO, highlighted that Q2 saw an acceleration in top-line growth, with every segment performing above historical sequential growth rates. He mentioned that the company is on track to sustain 4.5% organic growth in the second half of the year. Q: With three segments already at or above 30% operating margin, which segments do you expect to see more margin growth in the next 12-24 months? A: Michael Larsen indicated that all segments are expected to improve margins as they move towards their full potential. He mentioned specific segments like Automotive OEM, Test & Measurement, and Food Equipment as having room for margin improvement. Q: How do you measure CBI and account for any potential cannibalization from new products? A: Christopher O'Herlihy explained that CBI measures incremental revenues from new products introduced within the last three years, excluding cannibalization. He noted that CBI is a key metric for compensation within the company. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended June 2026, Illinois Tool Works (ITW) reported revenue of $4.3 billion, up 6.1% over the same period last year. EPS came in at $2.84, compared to $2.58 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $4.18 billion, representing a surprise of +2.83%. The company delivered an EPS surprise of +1.43%, with the consensus EPS estimate being $2.80. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Illinois Tool Works performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Operating Revenue - Organic growth - Total ITW: 4.5% compared to the 1.6% average estimate based on two analysts. Operating Revenue - Test & Measurement and Electronics - Organic growth: 10% versus the two-analyst average estimate of 2%. Operating Revenue - Automotive OEM - Organic growth: -0.4% versus 1.6% estimated by two analysts on average. Operating Revenue - Specialty Products - Organic growth: 1.6% compared to the 1.1% average estimate based on two analysts. Operating Revenues- Test & Measurement and Electronics: $769 million versus $711.73 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +12.1% change. Operating Revenues- Construction Products: $494 million versus $481.52 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +4.4% change. Operating Revenues- Food Equipment: $692 million versus $695.22 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +1.8% change. Operating Revenues- Specialty Products: $468 million versus the two-analyst average estimate of $465.35 million. The reported number represents a year-over-year change of +2.9%. Operating Revenues- Intersegment revenues: $-4 million versus $-2.81 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +33.3% change. Operating Revenues- Automotive OEM: $857 million compared to the $866.34 million average estimate based on two analysts. The reported number represents a change of +1.4% year over year. Operating Revenues- Welding: $549 million compared to the $497.44 million average estimate based on two analysts. The reported number represents a change of +14.6% year over year. Operating Revenues- Polymers & Fluids: $476 million compared to the $450.98 million average estimate based on two analysts. The reported number represents a change of +8.7% year over year. View all Key Company Metrics for Illinois Tool Works here>>> Shares of Illinois Tool Works have returned +6.5% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Manufacturing company Illinois Tool Works (NYSE:ITW) will be reporting results this Tuesday before market open. Here’s what to look for. Illinois Tool Works met analysts’ revenue expectations last quarter, reporting revenues of $4.02 billion, up 4.6% year on year. It was a mixed quarter for the company, with a beat of analysts’ EPS estimates but a slight miss of analysts’ organic revenue estimates. Is Illinois Tool Works a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Illinois Tool Works’s revenue to grow 3.3% year on year, improving from its flat revenue in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Illinois Tool Works has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Illinois Tool Works’s peers in the general industrial machinery segment, some have already reported their Q2 results, giving us a hint as to what we can expect. GE Aerospace delivered year-on-year revenue growth of 24.5%, beating analysts’ expectations by 6%, and 3M reported revenues up 5.6%, topping estimates by 1.5%. GE Aerospace traded down 3.2% following the results while 3M was up 7.3%. Read our full analysis of GE Aerospace’s results here and 3M’s results here. Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the general industrial machinery stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.5% on average over the last month. Illinois Tool Works is up 5.8% during the same time and is heading into earnings with an average analyst price target of $280.05 (compared to the current share price of $283.02). ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Illinois Tool Works (ITW) heads into its second quarter 2026 earnings release on July 28, with investors focused on whether its broad industrial portfolio can support projected earnings of $2.80 per share on revenue of $4.18 billion. See our latest analysis for Illinois Tool Works. Illinois Tool Works shares have moved steadily higher into the earnings date, with a 30 day share price return of 7.33% and a year to date share price return of 13.43%. The 1 year total shareholder return of 10.88% points to moderate long term gains and momentum that has picked up in recent weeks. If Illinois Tool Works has you thinking about where else industrial and infrastructure demand might show up, it could be worth scanning 35 power grid technology and infrastructure stocks For Illinois Tool Works, a 13.43% year-to-date gain and only a small gap to analyst targets raise a simple issue: are you paying up for sturdier fundamentals or a sentiment reset ahead of earnings, and how does that show up in today’s valuation? With Illinois Tool Works last closing at $283.02 against a narrative fair value of $280.05, the stock sits just above that widely followed estimate, putting the spotlight on what is built into those cash flow and margin assumptions. Read the complete narrative. Curious what earnings trajectory and profit mix need to hold for Illinois Tool Works to justify that price tag, and which margin levers do the heavy lifting over time? The narrative lays out a detailed roadmap for revenue growth, rising profitability, and the valuation multiple that ties those forecasts back to today’s price. Result: Fair Value of $280.05 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Illinois Tool Works still faces pressure where the narrative is most fragile, including softer construction and Test & Measurement and Electronics trends that already show revenue strain. Find out about the key risks to this Illinois Tool Works narrative. The narrative fair value pegs Illinois Tool Works as about 1% overvalued, yet the current P/E of 26x sits below the US Machinery industry average of 27.9x, the peer average of 33.6x, and even the 28.2x fair ratio. That gap suggests investors are paying slightly less than those benchmarks. This raises the question of whether the risk is more on the upside or the downside. See what the numbers say about this price — find out in our valuation breakdown. Mixed signals on Illinois Tool Works so far, with both risks and rewards in play. It may be useful to move quickly and test the story against your own expectations by reviewing the 4 key rewards and 1 important warning sign If Illinois Tool Works is already on your radar, do not stop there. Fresh ideas from different sectors can help balance your portfolio and sharpen your conviction. Expand your opportunity set with screener containing 20 high quality undiscovered gems that combine solid fundamentals with the potential to surprise the market. Strengthen the core of your holdings by checking solid balance sheet and fundamentals stocks screener (49 results) that prioritize resilience and dependable financial footing. Dial down potential volatility and still stay invested by reviewing 81 resilient stocks with low risk scores that score well on Simply Wall Street's risk checks. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ITW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]