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Illinois Tool Q4 Earnings Surpass Estimates, Revenues Miss
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Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2024 adjusted earnings of $2.54 per share, which surpassed the Zacks Consensus Estimate of $2.49. Earnings increased 7% year over year.
Illinois Tool’s revenues of $3.9 billion missed the consensus estimate of $4 billion. The top line inched down 1.3% year over year due to an unfavorable foreign currency translation of 1%. Also, organic sales decreased 0.5% while acquisition increased revenues by 0.2%.
For 2024, ITW reported net revenues of $15.9 billion, which decreased 1.3% year over year. For the year, the company’s adjusted earnings were $11.71 per share, up 20% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were up 2.2% year over year to $747 million. Our estimate for segmental revenues was $760.6 million. Revenues from Automotive Original Equipment Manufacturer decreased 3.7% year over year to $785 million. Our estimate for segmental revenues was $832.9 million.
Food Equipment generated revenues of $672 million, up 3% year over year. Our estimate for segmental revenues was $682.0 million. Welding revenues were $447 million, down 1% year over year. Our estimate for segmental revenues was $447.8 million.
Construction Products’ revenues were down 5% year over year to $438 million. Our estimate for segmental revenues was $461.8 million. Revenues of $416 million from Specialty Products reflected a decrease of 5% year over year. Our estimate for segmental revenues was $477.5 million. Polymers & Fluids’ revenues of $430 million declined 2% year over year. Our estimate for segmental revenues was $459.3 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool’s cost of sales decreased 3.9% year over year to $2.22 billion. Selling, administrative and research and development expenses decreased 0.5% year over year to $655 million. The operating margin was 26.2%, up 140 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the fourth quarter, Illinois Tool had cash and equivalents of $948 million compared with $1.1 billion at the end of December 2023. Long-term debt was $6.31 billion compared with $6.3 billion at the end of December 2023.
In 2024, Illinois Tool generated net cash of $3.28 billion from operating activities, reflecting a decline of 7.3% from the year-ago number. Capital spending on the purchase of plant and equipment was $437 million, down 4% year over year. Free cash flow of $2.84 billion decreased 7.8% year over year.
Illinois Tool’s 2025 Guidance
Illinois Tool expects earnings to be in the range of $10.15 - $10.55 per share. Organic revenues are expected to increase 0 - 2%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.
Illinois Tool projects free cash flow to be 100% of net income. The company expects to repurchase about $1.5 billion worth of shares. The tax rate is expected to be in the band of 24-24.5%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
Tetra Tech, Inc. (TTEK - Free Report) reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34. This compares with earnings of $0.28 per share a year ago.
Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.
Waste Management, Inc. (WM - Free Report) reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79. This compares with earnings of $1.74 per share a year ago.
WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.
Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.
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Illinois Tool Q4 Earnings Surpass Estimates, Revenues Miss
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2024 adjusted earnings of $2.54 per share, which surpassed the Zacks Consensus Estimate of $2.49. Earnings increased 7% year over year.
Illinois Tool’s revenues of $3.9 billion missed the consensus estimate of $4 billion. The top line inched down 1.3% year over year due to an unfavorable foreign currency translation of 1%. Also, organic sales decreased 0.5% while acquisition increased revenues by 0.2%.
For 2024, ITW reported net revenues of $15.9 billion, which decreased 1.3% year over year. For the year, the company’s adjusted earnings were $11.71 per share, up 20% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were up 2.2% year over year to $747 million. Our estimate for segmental revenues was $760.6 million. Revenues from Automotive Original Equipment Manufacturer decreased 3.7% year over year to $785 million. Our estimate for segmental revenues was $832.9 million.
Food Equipment generated revenues of $672 million, up 3% year over year. Our estimate for segmental revenues was $682.0 million. Welding revenues were $447 million, down 1% year over year. Our estimate for segmental revenues was $447.8 million.
Construction Products’ revenues were down 5% year over year to $438 million. Our estimate for segmental revenues was $461.8 million. Revenues of $416 million from Specialty Products reflected a decrease of 5% year over year. Our estimate for segmental revenues was $477.5 million. Polymers & Fluids’ revenues of $430 million declined 2% year over year. Our estimate for segmental revenues was $459.3 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote
Illinois Tool’s Margin Profile
Illinois Tool’s cost of sales decreased 3.9% year over year to $2.22 billion. Selling, administrative and research and development expenses decreased 0.5% year over year to $655 million. The operating margin was 26.2%, up 140 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the fourth quarter, Illinois Tool had cash and equivalents of $948 million compared with $1.1 billion at the end of December 2023. Long-term debt was $6.31 billion compared with $6.3 billion at the end of December 2023.
In 2024, Illinois Tool generated net cash of $3.28 billion from operating activities, reflecting a decline of 7.3% from the year-ago number. Capital spending on the purchase of plant and equipment was $437 million, down 4% year over year. Free cash flow of $2.84 billion decreased 7.8% year over year.
Illinois Tool’s 2025 Guidance
Illinois Tool expects earnings to be in the range of $10.15 - $10.55 per share. Organic revenues are expected to increase 0 - 2%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.
Illinois Tool projects free cash flow to be 100% of net income. The company expects to repurchase about $1.5 billion worth of shares. The tax rate is expected to be in the band of 24-24.5%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Tetra Tech, Inc. (TTEK - Free Report) reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34. This compares with earnings of $0.28 per share a year ago.
Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.
Waste Management, Inc. (WM - Free Report) reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79. This compares with earnings of $1.74 per share a year ago.
WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.
Packaging Corporation of America (PKG - Free Report) reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.
Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.