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ITW's Q3 earnings rose 6% year over year to $2.81 per share, topping the consensus estimate.
Revenues grew 2% to $4.06 billion, driven by currency gains and a 1% organic sales increase.
Operating margin expanded 90 bps to 27.4%, aided by 140 bps from enterprise initiatives.
Illinois Tool Works Inc. (ITW - Free Report) reported third-quarter 2025 adjusted earnings of $2.81 per share, which surpassed the Zacks Consensus Estimate of $2.56. Earnings increased 6% year over year.
Illinois Tool’s revenues of $4.06 billion missed the consensus estimate of $4.08 billion. However, the top line increased 2% year over year, driven by a favorable foreign currency translation of 2%. Organic sales increased 1% in the quarter, while product line simplification had an adverse impact of 1%.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were $698 million, flat year over year. Our estimate for segmental revenues was $712.9 million. Revenues from Automotive Original Equipment Manufacturer increased 7% year over year to $830 million. Our estimate for segmental revenues was $805.8 million.
Food Equipment generated revenues of $694 million, up 3% year over year. Our estimate for segmental revenues was $701.9 million. Welding revenues were $477 million, up 3% year over year. Our estimate for segmental revenues was $481.8 million.
Construction Products’ revenues were down 1% year over year to $473 million. Our estimate for segmental revenues was $476.5 million. Revenues of $452 million from Specialty Products reflected an increase of 3% year over year. Our estimate for segmental revenues was $450.3 million. Polymers & Fluids’ revenues of $441 million declined 2% year over year. Our estimate for segmental revenues was $452.4 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool’s cost of sales increased 1% year over year to $2.25 billion. Selling, administrative and research and development expenses increased 2.7% year over year to $676 million. The operating margin was 27.4%, up 90 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 140 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the third quarter, Illinois Tool had cash and equivalents of $924 million compared with $948 million at the end of December 2024. Long-term debt was $7.68 billion compared with $6.31 billion at the end of December 2024.
In the first nine months of 2025, Illinois Tool generated net cash of $2.16 billion from operating activities, reflecting a decrease of 0.2% from the year-ago number. Capital spending on the purchase of plant and equipment was $314 million, down 1.6% year over year. Free cash flow was $1.85 billion, down 0.1% year over year.
Illinois Tool’s 2025 Guidance
Illinois Tool updated its full-year 2025 financial guidance. ITW expects earnings to be in the range of $10.40 - $10.50 per share compared with $10.35-$10.55 expected earlier. Revenues are expected to increase 1-3% while organic revenues are anticipated to rise 0-2%. Operating margin is expected to be 26–27%. Enterprise initiatives are expected to contribute approximately 125 bps to the operating margin.
Illinois Tool projects the free cash flow to be approximately 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 around 23%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
Dover Corporation (DOV - Free Report) reported earnings of $2.62 per share in third-quarter 2025, beating the Zacks Consensus Estimate of $2.50. This compares with earnings of $2.27 per share a year ago.
Dover posted revenues of $2.08 billion in the quarter, missing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $1.98 billion.
Ardagh Metal Packaging S.A. (AMBP - Free Report) came out with earnings of eight cents per share in the third quarter of 2025, beating the Zacks Consensus Estimate of seven cents. This compares with earnings of eight cents per share a year ago.
Ardagh Metal posted revenues of $1.43 billion in the quarter, beating the Zacks Consensus Estimate by 2.7%. This compares with year-ago revenues of $1.31 billion.
Packaging Corporation of America (PKG - Free Report) reported earnings of $2.73 per share in the third quarter, missing the Zacks Consensus Estimate of $2.83. This compares with earnings of $2.65 per share a year ago.
Packaging Corp. posted revenues of $2.31 billion in the quarter, surpassing the Zacks Consensus Estimate by 2.2%. This compares with year-ago revenues of $2.18 billion.
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Illinois Tool Tops Q3 Earnings Estimates, Updates 2025 View
Key Takeaways
Illinois Tool Works Inc. (ITW - Free Report) reported third-quarter 2025 adjusted earnings of $2.81 per share, which surpassed the Zacks Consensus Estimate of $2.56. Earnings increased 6% year over year.
Illinois Tool’s revenues of $4.06 billion missed the consensus estimate of $4.08 billion. However, the top line increased 2% year over year, driven by a favorable foreign currency translation of 2%. Organic sales increased 1% in the quarter, while product line simplification had an adverse impact of 1%.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were $698 million, flat year over year. Our estimate for segmental revenues was $712.9 million. Revenues from Automotive Original Equipment Manufacturer increased 7% year over year to $830 million. Our estimate for segmental revenues was $805.8 million.
Food Equipment generated revenues of $694 million, up 3% year over year. Our estimate for segmental revenues was $701.9 million. Welding revenues were $477 million, up 3% year over year. Our estimate for segmental revenues was $481.8 million.
Construction Products’ revenues were down 1% year over year to $473 million. Our estimate for segmental revenues was $476.5 million. Revenues of $452 million from Specialty Products reflected an increase of 3% year over year. Our estimate for segmental revenues was $450.3 million. Polymers & Fluids’ revenues of $441 million declined 2% year over year. Our estimate for segmental revenues was $452.4 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 increased 1% year over year to $2.25 billion. Selling, administrative and research and development expenses increased 2.7% year over year to $676 million. The operating margin was 27.4%, up 90 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 140 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the third quarter, Illinois Tool had cash and equivalents of $924 million compared with $948 million at the end of December 2024. Long-term debt was $7.68 billion compared with $6.31 billion at the end of December 2024.
In the first nine months of 2025, Illinois Tool generated net cash of $2.16 billion from operating activities, reflecting a decrease of 0.2% from the year-ago number. Capital spending on the purchase of plant and equipment was $314 million, down 1.6% year over year. Free cash flow was $1.85 billion, down 0.1% year over year.
Illinois Tool’s 2025 Guidance
Illinois Tool updated its full-year 2025 financial guidance. ITW expects earnings to be in the range of $10.40 - $10.50 per share compared with $10.35-$10.55 expected earlier. Revenues are expected to increase 1-3% while organic revenues are anticipated to rise 0-2%. Operating margin is expected to be 26–27%. Enterprise initiatives are expected to contribute approximately 125 bps to the operating margin.
Illinois Tool projects the free cash flow to be approximately 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 around 23%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Dover Corporation (DOV - Free Report) reported earnings of $2.62 per share in third-quarter 2025, beating the Zacks Consensus Estimate of $2.50. This compares with earnings of $2.27 per share a year ago.
Dover posted revenues of $2.08 billion in the quarter, missing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $1.98 billion.
Ardagh Metal Packaging S.A. (AMBP - Free Report) came out with earnings of eight cents per share in the third quarter of 2025, beating the Zacks Consensus Estimate of seven cents. This compares with earnings of eight cents per share a year ago.
Ardagh Metal posted revenues of $1.43 billion in the quarter, beating the Zacks Consensus Estimate by 2.7%. This compares with year-ago revenues of $1.31 billion.
Packaging Corporation of America (PKG - Free Report) reported earnings of $2.73 per share in the third quarter, missing the Zacks Consensus Estimate of $2.83. This compares with earnings of $2.65 per share a year ago.
Packaging Corp. posted revenues of $2.31 billion in the quarter, surpassing the Zacks Consensus Estimate by 2.2%. This compares with year-ago revenues of $2.18 billion.